PLAN: Reservoir Engineering Fundamentals

Scenario

You are part of a team of E&P specialists responsible for evaluating a recent discovery in the Republic of Sucre. Your immediate objective is to determine formation properties and estimate hydrocarbon recovery potential, based on the limited information currently available. This will be the first step in developing a detailed reservoir model and, if justified, a long-term reservoir management plan.

generate a procedure for preparing and analyzing selected core samples, specifying the tests to be run and the information to be obtained; describe the laboratory techniques and perform the calculations used for determining rock properties

In this assignment, you will define the basic rock and fluid
properties of a recently discovered reservoir in the Republic of
Sucre.

You will be in charge of obtaining representative fluid samples and
determining their Pressure-Volume-Temperature (PVT) characteristics. You will also design a coring and
core analysis program for a new well, and use the results to define
basic rock properties and rock-fluid interactions.

The discovery well, Well 4E1-NE, tested at 1550 STB/D of 35 degree API oil [246 m3/D, 0.85 specific gravity], with a producing gas-oil ratio of 680 SCF/STB [121 m3/m3] and a water cut of about three percent. It is currently on an extended production test.

The second well drilled in this field , Well 5C1-SW, tested all water and was subsequently suspended.

Before your company acquired these drilling blocks, a medium-sized
independent had run a series of seismic surveys in the area. Your company purchased these data, from which
the Geology and Geophysics departments constructed a subsurface
contour map showing the approximate structure boundaries and
the top of the Upper Sand.

You are now part of the interdisciplinary team charged with characterizing the reservoir and developing an optimal exploitation
strategy. Right now, you do not have much to work with—just the
contour map and the well data obtained so far. (You can access this material by clicking on the References that accompany each assignment question.)

What you will need to do at this point, then, is to use the
available data to try to define some basic reservoir
rock and fluid properties.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Upon completing this Learning Module assignment, the participant should be able to

define the following rock mechanical properties under various conditions of confining pressure, describe how these properties influence wellbore stability, directional drilling considerations, well completion design and other aspects of reservoir development, and know how they are measured in the laboratory:

Upon completing this Learning Module assignment, the participant should be able to

identify the presence and orientation of fracture systems in the reservoir

Assignment Instruction:

To understand formation stress response, we start by
measuring the mechanical properties of representative
core samples in the laboratory. This gives us information
about the rock's strength and stability under a given set of
conditions.

We then apply this empirical knowledge to the formation
by combining our core observations with such geologic
information as well logs, structure maps and regional
outcrop studies.

In this assignment, you will review core descriptions
for evidence of natural fractures and other tectonic activity.
You will then incorporate your observations with other
data sources to determine the principal stress directions in
the formation.

Core analysis, including rock mechanical
properties tests, have been done on selected samples from Well
2A5-NE. Early seismic measurements and log data
from offset wells indicate that the reservoir is bounded by
normal faults on the east and west.

Your objective in reviewing this core information is to

(1)

determine the formation’s principal stress directions,

(2)

and find indications of tectonic activity.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Contribute to the efforts of a multidisciplinary reservoir management team, based on a general knowledge of related disciplines.

Learning Objective:

Upon completing this Learning Module assignment, the participant should be able to

demonstrate a basic knowledge of disciplines outside of reservoir engineering (i.e., Geology, Sedimentology, Petrophysiscs, Geophysics, etc.), and establish a working relationship with specialists from these disciplines.

understand the role of different disciplines in the overall process of reservoir characterization and exploitation.

Assignment Instruction:

Much of our reservoir data comes from
disciplines outside of reservoir engineering. The initial structure map, for example, may be generated from seismic measurements
and geological interpretation, with subsequent information coming from well logs, cores, production data and other sources.

In this assignment, you will review the well and field data that have
been gathered to date for the Upper/Middle sands, so that you can have an idea of what
tools are available for describing the subsurface environment.
You will also look at how various E&P disciplines may fit
into the overall reservoir management task.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

PLAN: Basin Analysis

Scenario

Basin analysis is a geologic method by which the history of a sedimentary basin is revealed by analyzing the sediment fill. Aspects of the sediment--namely its composition, primary structures, and internal architecture--can be synthesized into a history of the basin development. The ultimate goal is to identify the extent of hydrocarbons and hydrocarbon-bearing rocks. Basin analysis is carried out on both the surface outcrop and the subsurface strata. In this Learning Plan you will study techniques used by the petroleum industry to understand the subsurface rocks and application to hydrocarbon exploration.

Task Summary:

Basin analysis is the term broadly applied to a group of geological disciplines that can be used to analyze the formation and evolution of sedimentary basins. Therefore basin analysis is used to aid in the evaluation of potential hydrocarbon reserves. The modules in this Learning Plan will help to give you a better understanding of how to analyze the basin's depositional environments, the age and position of the stratigraphic sequences in the basin, and the size and internal geometry of the stratigraphic units. Then you will review the geochemistry analysis to determine the hydrocarbon potential critical to the exploration of a basin.

Use core data, well cuttings, and well logs to construct lithostratigraphic columns, infer depositional environments and build geologic cross-sections.

Review facies trends and extrapolate them to a regional scale.

Use sedimentological interpretations as a basis for building facies distribution maps and net-to-gross sand isopach maps.

Assignment Instruction:

As a member of the New Ventures Team for Beta Exploration, Inc., your responsibility is to evaluate new hydrocarbon exploration opportunities. Your role is to understand the sedimentary development and hydrocarbon potential of basins that Beta Exploration, Inc. desires to explore. In many cases, recommendations must be made with a limited amount of data.

This learning module will allow you to use the data available in this region to interpret the depositional systems.

The existing information in this exploration area is limited. Some wells have been drilled in the past and SP and gamma logs are available. New wells have been drilled recently and intervals of interest were cored. Gathering, defining and interpreting well data are important tasks of exploration geologists to construct correlations and maps.

The base map of the region is below. The data set used for this exercise includes surface outcrop information, core descriptions and electric logs of wells.

You will have the description of grain size and texture, primary sedimentary structures, ichnofacies and other data to classify the lithofacies and complete the facies analysis for certain wells. Additionally, you will calibrate cores to well logs to complete your analysis.

Using this information, you will interpret the facies successions and depositional environments in each well. Subsequently you will construct a correlation with 5 wells (1, 2, 3, 4 and 5) and map paleoenvironments distribution.

Finally, you will make a net sand map to observe the trend of sandstone deposition.

Base Map

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

In recent years, a better understanding of the geologic and sedimentary processes associated with sequence stratigraphy revived interest in its application to basin analysis. Sequence stratigraphy provides a means of interpreting the depositional history of a basin in terms of base level movements driven by eustatic sea level changes and by tectonic activity. These allogenic (external) drivers of base level movement interact with sediment supply to determine the creation (BL rise) or destruction (BL fall) of accommodation space for sediments in a basin.

Given that base level is continually changing, the key point for sequence stratigraphy is that this results in a number of distinct sedimentary surfaces that reflect depositional breaks and/or changes of depositional trend which bound stratigraphic sequences.

These surfaces include Material Based surfaces such as a Subaerial Unconformity (SU), a Regressive Surface of Marine Erosion (RSME), a Shoreline Ravinement (SR), a Maximum Regressive Surface (MRS), a Maximum Flooding Surface (MF), or a Slope Online Surface (SOS) and Time based surfaces termed the Basal Surface of Forced Regression (BSFR) and the Correlative Conformity (CC). Recognition and use of these surfaces in sequence stratigraphy are explored.

Upon completion of this module the learner will be able to place a stratigraphic succession into a chronostratigraphic framework to determine depositional environments and related facies by analyzing well logs, core samples, outcrops, seismic lines and other information. You will use a predictive model to evaluate the basin-wide distribution of petroleum source, reservoir and cap rocks.

Learning Objective:

Recognize and explain the principle material based surfaces used in sequence stratigraphy (e.g., SU, RSME, SR, MRS, MFS, and SOS) and the chronostratigraphic surfaces (BSFR and CC).

As a member of the Exploration team for Beta Petroleum Co., you have been selected for a sequence stratigraphy study in the Eastern Venezuelan Basin, one of the largest oil producing basins of the world. As part of your responsibilities, you will have to provide information on the continuity of reservoirs and regional seals that might be useful for the rest of your team.

The section comprises a fluvial deltaic system deposited during the Early Miocene (18.5 Ma) and Middle Miocene (13.8 Ma). The units deposited since the Early Miocene unconformably overlie Cretaceous shales with high organic matter content, which constitutes most of the source rock which for the hydrocarbons of the basin.

The geological interpretation of well logs was integrated with the biostratigraphic and sedimentological information obtained from core and sidewall samples. This integration allowed for the sedimentary section to be subdivided into geometrical packages bounded by unconformities. Based in this interpretation, third order sequences were identified.

To carry out this exercise GR and resistivity logs of 5 wells were used, as well as information from two cores taken from Wells 1 and 4.

The figure below shows the location of the wells studied.

Wells location map.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Upon completion of this module the learner will be able to define sequence stratigraphic units with seismic reflection data. Analyze systems tracts and determine depositional environments from the established sequence stratigraphy framework. Predict the basin-wide distribution of petroleum source, reservoir and seal rocks from seismic data.

Learning Objective:

Explain key concepts of seismic sequence stratigraphy and the techniques used to evaluate seismic data.

Integrate available well, biostratigraphic and outcrop data into the framework.

Determine depositional environments and facies.

Predict petroleum reservoir occurrences using seismic data.

Assignment Instruction:

As a member of the New Ventures Exploration Team, your responsibility is to evaluate new petroleum exploration opportunities for Beta Exploration, Inc. As the Seismic Sequence Stratigrapher your role is to evaluate the seismic data to identify potential source, reservoir, and seal rocks in the strata of prospective basins and to locate favorable petroleum traps.

The study area is located to the northeast of the Australian Platform (Location map). The stratigraphic section ranges in age from Upper Triassic to Lower Cretaceous. This exercise is roughly based on a paper by Erskine and Vail (in Bally, A. W. (editor), Atlas of Seismic Stratigraphy, AAPG 1987).

Three seismic lines are available for the exercise. In addition, two wells A and B support the stratigraphic interpretation of the area. See location map below.

Four unconformities, as well as their correlative surfaces, bound three third-order sequences identified from older to younger as I, II and III. Systems Tracts are labeled. The age of the unconformities were determined through paleontological data obtained from wells drilled in the area and from the global marine cycles chart. The sequence boundaries are named SB132, SB129, SB127 and SB126.

TD (Time Depth) plots were derived for both wells by means of synthetic seismograms calculated from sonic logs taken in the wells. The creation of synthetic seismograms allows well information in depth to be tied to seismic data in time. Thus, we are able to evaluate the same lithological intervals in the well and on the seismic line.

As a final remark, a composite stratigraphic cross section, which integrates the seismic and the well data, is provided to show the result of this seismic stratigraphy exercise. (See Integrated stratigraphic section in Assignment 5 - Prediction of potential source, reservoir, and seal rocks)

Location map

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Use plant and animal fossils from well cuttings, cores or outcrops to differentiate rock units, determine the ages of the units, and infer the sedimentary depositional environment.

Learning Objective:

Identify the different groups of microfossils used in biostratigraphy.

Infer sedimentary depositional environments of sediments based on identification, classification, and occurrences of microfossils.

Use microfossils for estimating the ages of rock units.

Demonstrate the use of microfossil abundance and diversity charts.

Use microfossils to correlate rock units between wells.

Assignment Instruction:

Beta Exploration Inc. is planning a bid for a new block in a basin. As a member of the exploration team, your role is to analyze the biostratigraphic information available from four wells in the area. You will integrate the biostratigraphic analysis with well-logs and seismic profiles near the block.

This exercise begins with biostratigraphic analysis by examination of microfossils. Several groups of microfossils help to estimate the ages of rock units through biostratigraphy and to interpret sedimentary depositional environments.

Biostratigraphic units (biozones) were inferred from first occurrences of microfossils down hole in each well. The ages were assigned using the zonal schemes from the area. The accompanying charts with equivalent zonal schemes will enable you to build a biostratigraphic correlation of the 4 wells.

Microfossil indicators of depositional environments allow interpretation of biofacies changes through the stratigraphic section. You will make a paleoenvironment map of the area.

The integration of biostratigraphy with other geological disciplines, such as geophysics, sedimentology, petrophysics, and geochemistry facilitates sedimentary basin analysis and petroleum exploration. This is essential for planning and developing favorable petroleum prospects.

The Chronostratigraphic chart is from 'Chronostratigraphic equivalence of the palynological zonations for northern South America and Venezuela' (modified from Lorente and others, 1997) and contains ages of stage boundaries (in Ma) according to Haq and others (1987) and Berggren and others (1995).

A chronostratigraphic correlation between the wells using biostratigraphy allows interpretation of maximum flooding surfaces (mfs) in well 4 and their association with important chronostratigraphic species (bioevents) and global sea level curves.

Base map with wells

Chronostratigraphic chart

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Upon completion of this module the learner will understand geochemical concepts relating to the origin and occurrence of petroleum. Describe oil and gas chemical composition and classification. Identify source rock based on geochemical analysis. Interpret petroleum migration from source rock to subsurface hydrocarbon accumulation.

Learning Objective:

·Understand chemical composition and classification of oil and gas.

·Describe the types of kerogen and the generation, expulsion and migration of petroleum.

·Use principal tools and methods for evaluation of source rock quality and maturity.

·Evaluate one-dimensional geochemical model.

Assignment Instruction:

As a member of the New Ventures Exploration Team, you are assigned to evaluate a regional integrated geochemical study of a sedimentary basin relevant to hydrocarbon habitat. The study includes source rock evaluation, oil geochemistry and their correlation with source rock, reconstruction of the hydrocarbon generating area and geochemical modeling of a pilot well.

The drainage area of the basin is bounded to the north and northeast by faults, and to the southeast, south, and west by mountains (Figure 1). The tectonic setting of the basin evolved during the Cretaceous Period and the Cenozoic Era. The present structural configuration of the basin developed during the Miocene to Holocene Epochs as it became an intermontane basin in a foredeep position.

An Aptian to Albian Age marine transgression deposited a thick shallow water carbonate platform and associated sediments. During maximum transgression between the Cenomanian Age and the Coniacian Age, the sedimentation was pelagic and euxinic facies of limestones and calcareous shales. During Paleocene Epoch, clastic sediments were deposited in the southwest and western basin areas and a shallow marine platform occurred in the central basin. During the lower to middle Eocene Epoch, the sedimentation was mainly fluvial in the southwest, fluvio-deltaic to deltaic on the platform, and turbidite and flysch in the east.

Geochemical analyses of cores and cuttings from nearly 100 wells included TOC, pyrolysis, visual kerogen, UV, GC, GC-MS biomarkers, and TTI. The important oil prone source rocks were deposited during the Cretaceous. Organic carbon (OC) ranges between 1.5% and 9.6% (average of 3.8%) in limestone and calcareous shales with high concentrations of extractable organic matter (>2000 ppm) and hydrocarbons (>1000 ppm). The Paleocene and Eocene sequences in the basin contain mainly gas prone type III organic matter with low potential.

Figure 1 - Location of wells studied in the basin

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

PLAN: Dynamics of Deformation

Scenario

Identifying new petroleum exploration opportunities requires a solid understanding of a basin's structural development history as a result of global plate tectonics. The tectonic setting, the formation, the sedimentation and the deformation of a basin influence the creation of hydrocarbons and the potential hydrocarbon trapping style and production in the basin. Structural geology tools interpret different structural styles and predict potential trapping configurations. Rock properties and mechanics are applied to exploration problems related to tectonics, seismic evaluation, or reservoir performance.

In this learning plan you will apply tectonic plate movement to the genesis, evolution, structural deformation, and hydrocarbon potential of the Caribbean region. Use structural geology to evaluate the structural style of the overall petroleum system. Analyze reservoir characteristics and seismic response with rock mechanical properties.

Task Summary:

You will complete assignments related to the role of global plate tectonics on the formation, the tectonic evolution and the resultant hydrocarbon traps of the Maracaibo Basin in the Caribbean region.

Emphasis will be on the evolution of the main faults, their movement, periods of deformation and type of basin formed as a result. Examination of the different stages of the paleogeographic evolution of the basin including rifting, foreland basin structural deformation and passive margin development will focus on petroleum exploration.

Evaluate the structural style and potential hydrocarbon trapping configurations in the basin.

Calculate rock mechanical properties of a reservoir target to estimate the acoustic response to different fluids.

Beta Exploration Inc. has assigned the New Ventures Exploration Team to evaluate a lease sale in the Maracaibo Basin. An accurate understanding of the regional tectonics is necessary for the team to interpret the stratigraphy and petroleum potential of the lease blocks. You will provide an evaluation of the plate tectonics setting, basin development and potential trapping style.

You will apply global plate movement and lithosphere formation and subduction to the genesis, tectonic evolution and structural deformation of the Maracaibo Basin in the Caribbean region. Interpret the development of the main fault systems, their movement, periods of deformation and type of basin formed. Examine the different stages of the paleogeographic evolution of the basin including rifting, foreland basin structural deformation and passive margin development.

You will use sample seismic lines and a structural contour map to interpret the structural style and the type of faulting present in the basin. Identify the hydrocarbon migration routes and potential hydrocarbon traps resulting from this structural style.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Use structural contour maps and cross sections based on seismic and well log data to identify and interpret different structural styles related to the tectonic setting. Analyze and predict potential hydrocarbon trapping configurations based on the structural style. Evaluate the effect of structural style on the overall petroleum system of a basin.

Beta Exploration Inc. has assigned the New Ventures Exploration Team to evaluate a lease sale in the central part of the Maracaibo Basin for Lake Oil Ventures Ltd, a subsidiary of Beta Exploration Inc. You will identify the tectonic setting and structural style, determine potential trapping configurations corresponding to the structural style, and evaluate petroleum potential of the lease blocks.

Structural style is based on comparative tectonics that identifies patterns in deformation which can be observed on a global scale. Structural geology examines regional structural features, their interrelationships, evolution, and effects on sedimentation. Structural geology and structural style allow prediction of source and reservoir rocks, hydrocarbon migration paths, and potential hydrocarbon traps prior to exploration.

You will identify the structural style and the type of faulting present in the central part of the Maracaibo Basin using a structural contour map and block diagrams and cross sections drawn from well logs and seismic data. Predict potential hydrocarbon traps resulting from a structural style.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Rock Mechanics is a very powerful approach for reservoir description and management. It provides useful and efficient links between mechanical and acoustical properties which lead to a deep understanding of the stress-strain behavior of subsurface beds. Used properly, together with geostatistical concepts, it can substantially help to elaborate an accurate picture of our geological targets.

You are a rock mechanics specialist assigned to the Exploration New Ventures team. Exploration team members come to you to gain insight and support in applying rock properties and mechanics to exploration problems. These problems may be related to tectonics, seismic evaluation, or reservoir performance. You often have a limited dataset to interpret.

In this assignment, you will calculate the elastic modulus of a reservoir target using laboratory data from well cores and well logs. Using these characterizations together with fluid substitution concepts and storage (porosity) and transport (permeability), you will be able to estimate the acoustic response to different saturation fluids.

In this sense, you will:

Calculate porosity and permeability from laboratory data

Use stress-strain relationships for linear elasticity to estimate the elastic modulus

Use inversion from acoustic logs and laboratory data to estimate the elastic modulus

Give a very educated guess for the stress state on the subsurface

Estimate the seismic signature of fluids and porosity

Note: Answers are used as input for subsequent questions.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Identify, monitor and evaluate drilling, workover, stimulation and well servicing proposals and activities in the context of optimizing the overall reservoir exploitation scheme.

Learning Objective:

Upon completion of this module, the participant should be able to

contribute to the well planning process by understanding
the reservoir engineering aspects of the proposed work and
having a knowledge of drilling, workover and well servicing
fundamentals

work with the geologist and the drilling engineer to
select well locations, target depths and casing points

Assignment Instruction:

Long-term exploitation strategies for this reservoir are currently being considered for the Upper/ Middle Sand reservoir. Management has appropriated funds for continued drilling, and has already approved a new well proposal for Block 5A1-SW.
In this assignment, you will recommend the target depth and radius for well 5A1-SW. You will determine what mud weights to use during drilling, specify casing points, and decide on formation evaluation requirements.
This reservoir has been on production for just over two years. A total of six wells have been drilled, one of which was abandoned.
Production is currently averaging about 2000 barrels of oil per day under solution gas drive at well over its bubble point pressure.
These wells, although initially designated as "Upper Sand" producers, expose both the Upper and Middle sand reservoirs.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Select the appropriate tubing and accessories for completing wells in keeping with the production method required for the reservoir, and to facilitate future workover, servicing and stimulation work.

Learning Objective:

Upon completion of this module, the participant should be able to

select the proper sizes and grades of tubulars to
maintain the integrity of the wellbore and handle
anticipated production

select the downhole casing and tubing accessories
needed to optimize production and future well work

Assignment Instruction:

Well 5A1-SW is currently in the planning stage. The well specifications established so far include target depth and radius, well profile, mud weight requirements, approximate casing points and formation evaluation needs.

In this assignment, you will work on the well's completion design. You will select the completion type and tubing configuration, specify the casing and tubing diameters to be used, and design the surface and production casing strings.

The success of your design will depend on how well it handles the anticipated production, compatibility of the various hole, casing and tubing sizes, adequacy of the casing design loads, and cost.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Select the appropriate drilling/workover fluid for meeting well objectives and, minimizing formation damage with no impact on the environment.

Learning Objective:

Upon completion of this module, the participant should be able to

evaluate the features, benefits and limitations of various mud systems and additives, and select the one most appropriate for a given well

specify controls on fluid properties in order to optimize drilling and workover operations

Assignment Instruction:

Drilling and completion fluids are essential to safe and successful well operations. In this assignment, you will select the appropriate fluids for drilling and completing Well 5A1-SW, monitor their properties, and recommend changes as needed. By the time you complete this module, you should be able to evaluate the features, benefits and limitations of various mud systems and additives, and specify controls on fluid properties for optimizing drilling and workover operations.

The AFE for drilling Well 5A1-SW has been approved, and operations are getting underway. Once drilling begins, your job will be to closely monitor the properties of the mud system you have selected, and to make changes in the mud system as operating conditions may require.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

The objective of a drilling hydraulics program is to maximize bit life and penetration rate by efficiently removing drilled cuttings and by cleaning, cooling and lubricating the bit and drill string. The key to a sucessful hydraulic program is to deliver an optimal amount of energy to the bit.

The easiest way to control and optimize drilling hydraulics is to select the appropriate bit nozzle diameters for delivering the maximum amount of hydraulic energy to the bottom of the hole.

Determine the most appropriate procedures, equipment, tools and cementing materials for assuring a high-quality cement job.

Learning Objective:

Upon completion of this module, the participant should be able to

determine the volume, displacement and density requirements for cementing a casing string

select the cement additives appropriate to a given job

specify the casing accessories to be use on a primary cement job

outline the steps involved in cementing a string of casing

evaluate the results of a primary or squeeze cementing operation

calculate the volumes and displacements required to set a cement plug

Assignment Instruction:

In this assignment, you will determine the appropriate
procedures, materials and equipment for assuring a
high-quality cement job on Well 5A1-SW. By the time you
complete this module, you should be able to determine
cement volume, density and displacement requirements,
select cement additives, specify casing accessories,
outline cementing procedures, evaluate job results, and
make basic cement plug calculations.

Well 5A1-SW has been drilled to T.D., and the openhole
formation evaluation program has been completed. It is now
time to run and cement the production string. The purpose
of this primary cement job, in which cement slurry is
pumped down through the casing and up the casing-hole
annulus, is to form a seal between the casing and formation,
and to support the weight of the casing string.

In this module, you will determine how much cement you
need for the production casing, what materials and
additives you should use, what casing accessories and
equipment you need, and what procedures you should follow.
You will then evaluate the success of the primary cement
job and, if necessary, recommend remedial work.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Contribute to the planning and design of non-conventional well completions.

Learning Objective:

Upon completion of this module, the participant should be able to

identify reservoirs that are suitable candidates for horizontal or multilateral wells

apply knowledge of the reservoir to a selection of the well trajectory

select the best general completion design for a horizontal or multilateral well in a given reservoir

Assignment Instruction:

Without directional drilling much of the world's oil and gas would be unrecoverable. Horizontal and multilateral wells, which are special applications of directional drilling technology, are a proven means of improving productivity and reducing overall development costs in certain types of reservoirs.

In this assignment, you will define basic directional drilling parameters and establish the trajectory for a possible re-drill of an existing well. You will look at the feasibility of horizontal and multilateral wells from a reservoir management perspective, and consider some of the issues involved in planning and designing these wells. By the time you complete this module, you should be able to calculate a simple well trajectory, identify candidate reservoirs for horizontal wells and select the best general completion design for a given reservoir.

Well 5C1-SW was the second well drilled in the Upper/Middle sands. Detailed log analysis and an open hole formation test indicated that the top of the Upper Sand at 14800 ft [4511 m] was below the oil-water contact. The well was subsequently plugged back with cement to the surface casing and suspended

Several members of the reservoir management team have suggested re-drilling this well upstructure to Block 5B1-NE. The drilling department will evaluate the feasibility and costs of re-drilling from below the surface casing. Your job will be to establish some of the basic directional parameters and calculating a trajectory for this well, which will be designated 5C1-SW R/D.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

PLAN: Production Fundamentals

Scenario

One of your jobs in this Learning Plan is to select the subsurface production equipment configuration for Well 5A1-SW, which will soon be selectively perforated in the Upper and Middle sands, and to predict the well's flowing performance. Other tasks will involve artificial lift screening, stimulation planning and production optimization, as well as developing general guidelines for testing new well in the Sucre field.

The team now feels that it has enough information to begin planning surface production facilities for the Sucre field. The other members want your input in determining the size and rough layout of these facilities.

Task Summary:

Select a general well configuration and specify requirements for subsurface production equipment. Describe the production system using nodal analysis, and predict flowing well performance. Evaluate potential artificial lift methods. Optimize well performance. Diagnose operating problems. Develop general well testing guidelines. Determine surface facility handling requirements, equipment needs and overall layout.

determine when artificial lift will be necessary
in order to maintain oil production at desired levels,
and select the most appropriate lift method for a
given well

specify design and equipment requirements for
placing a well on artificial lift

Assignment Instruction:

In this Learning Module, you will specify the completion
design for Well 5A1-SW and evaluate its performance
potential. By the time you complete this module, you
should be able to optimize flowing well performance
using nodal analysis principles, determine when
artificial lift will be necessary in order to maintain
oil production, and select the best lift method for a
given set of operating conditions.

Well 5A1-SW has been recently drilled to the Upper/Middle
sands. It is to be completed by selectively perforating
the 7-inch casing, which has been cemented at a depth of
14400 ft. In this module assignment, you will review
actual and estimated field data, select the general well
configuration, and specify requirements for subsurface
producing equipment. You will define the well's inflow
performance relationship (IPR), determine its vertical
lift performance for various producing rates, and
establish surface flow parameters. You will then combine
these analyses to define and predict the flowing well's
performance. You will also review various artificial
lift methods to determine how this well will be produced
once it can no longer flow.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

recommend actions required for optimizing
production, identify candidate wells for well
servicing, stimulation and/or sand control and
indicate the best method to use

Assignment Instruction:

In this Learning Module, you will review the actual
performance of Well 5A1-SW, as well as that of several
other wells in offsetting fields, in an effort to
optimize their production rates. By the time you
complete this module, you should be able to analyze well
behavior using nodal analysis and historical
production trends, diagnose equipment problems and/or
detect production deviations, and recommend the
appropriate action for optimizing production.

Well 5A1-SW has been completed in the Upper/Middle
sands, and a production and buildup tests have been
completed. You now need to see if the well's actual
performance matches what was predicted before its
completion. You will be looking for ways to optimize
this well's production under both current and future
reservoir conditions. You will also look at other wells,
including two that are currently producing using
electric submersible pumps and one that is planned as a
rod pump completion, and make recommendations regarding
their performance.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

generate a general surface facilities layout
showing the path of the produced fluids from the
wellhead to the transportation point (pipeline or
loading rack)

Assignment Instruction:

In this Learning Module, you will make preliminary
recommendations regarding the surface production facility
design for the Sucre field. By the time you complete this
module, you should be able to determine basic
requirements for handling produced oil, water and
gas, and develop a general surface facility layout showing
the path of the produced fluids from the wellhead to the
sales point.

A production forecast has been generated for the
Upper/Middle sands based on extended production tests and
currently available rock and fluid data. You will decide
how to use this forecast in sizing the surface
facilities, and you will determine what types of fluid handling,
separation and treating equipment will be needed. You will
also specify the path that the produced fluids will follow
through the production facility. Although your work will be
of a very preliminary and general nature, it will be
instrumental in future cost analyses, budget planning, and,
ultimately, selection of an optimal reservoir development
scenario.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

design a pressure transient test and select
equipment in keeping with the stated objectives

monitor the test and interpret the results

Assignment Instruction:

In this Learning Module, you will establish basic objectives
and procedures for testing new wells in the Upper/Middle
sands of the Sucre field. You will also review tests that
were run in other reservoirs, and use the results of a drill
stem test (DST) to determine well deliverability parameters.
By the time you complete this module, you should be able plan,
execute, monitor and interpret a simple pressure transient
test.

Formation evaluation of the Upper/Middle sands--including
successful production tests of Wells 4E1-NE and 5A1-SW--has
established this reservoir's commercial hydrocarbon potential.
The reservoir management team has generated estimates of oil
in place and recovery factors; it has even predicted a
production schedule and outlined basic surface facility
specifications. These estimates are, however, very preliminary,
and based on assumptions which may or may not prove valid over
time. There is still a good deal of appraisal and planning to
be done before the reservoir moves into the development stage
of its life.

Your assignment in this Learning Module is to assist in the
reservoir appraisal by developing general guidelines for a
well testing program, based on your understanding of formation
evaluation objectives and test procedures. You will also be
looking at DST results from wells in other fields so that you
may become familiar with basic methods of test monitoring and
interpretation. In later assignments, you will become more
involved in the analysis of pressure transient tests,
particularly with respect to modern interpretation methods.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

PLAN: Surface Geology and Reconnaissance

Scenario

In this Learning Plan you will learn to read surface geologic maps and how to evaluate geologic cross-sections based on these maps. You will use remote sensing data to interpret surface geology exposed over a larger geographic area. Combining knowledge from old maps with newer maps and other representations of the earth's surface requires geodetic coordinate systems. Working with rocks in both the outcrop and wellbore is critical to understanding the stratigraphy and structures of a basin. You will be exposed to the role of various stratigraphic tools including magnetostratigraphy, chemostratigraphy, isotopic dating and learn about their pitfalls and use in the exploration for hydrocarbons. Identify main applications for gravity, magnetics and electro-magnetic surveys to explore basins for petroleum at a relatively low cost.

Task Summary:

As a member of a petroleum exploration team you will use various geologic methods and reconnaissance surveys to understand the development of a basin targeted for exploration and production activity. You will be asked to evaluate the surface geology and tie it into the subsurface. You will interpret the geomorphology and the surface geologic features of the basin using Landsat and radar images. Use geodetic coordinate systems to develop a topographic base map for a seismic survey and other geophysical surveys for initial exploration activity. Apply magnetostratigraphy, chemostratigraphy, and radiometric dating to determine the chronostratigraphy of the basin. Estimate the depth to basement and thickness of sediments in the basin with gravity, magnetics, and electromagnetic surveys.

Identify geologic units and structural elements on a surface geologic map. Demonstrate the use of geologic cross sections to tie these surface features into the subsurface.

Learning Objective:

Demonstrate ability to read surface geologic maps.

Understand various geologic cross-section preparation techniques and factors to evaluate the relationship between the surface geology and the subsurface geology.

Locate a particular rock unit and define the geographic distribution of that rock unit on a surface geology map.

Use outcrop descriptions from a stratigraphic column to interpret rock units on a geologic map.

Assignment Instruction:

As a Geologist in the New Ventures Team for Beta Exploration, Inc., your assignment is to evaluate new hydrocarbon exploration opportunities in the Eastern Venezuela Basin (see Location Map). Use the surface geologic map, geologic cross section and stratigraphic column provided in References and Field Data to interpret the surface geology and tie it into the subsurface. This information will aid in understanding the stratigraphy, structure, and petroleum system.

The studied area is located at the southern flank of the eastern Serrania del Interior (see Location Map). The surface geologic map shows the geographic distribution of the Cretaceous sedimentary rocks that outcrop in the area. The map was drawn using outcrop information, topography, and aerial photography.

The Cretaceous stratigraphic section consists of the Barremian to Albian age Barranquin, Garcia and El Cantil Formations and the Campanian age San Antonio Formation:

• The Garcia Formation represents a rapid deepening of the environments, as well as deposition of 90 meters of dark, calcareous, highly fossiliferous shales.

• The El Cantil Formation is characterized by a shallowing trend of marine limestones and sandstones with carbonaceous shales.

• The San Antonio Formation is in fault contact with the Barranquin, Garcia and El Cantil Formations in the southern geologic map area.

Geologic cross section A-B presents the stratigraphic and structural configuration of the Early Cretaceous Formations on a west to east topographic profile across northern geologic map area.

The characteristic shaly and fossiliferous lithology of the Garcia Formation represents the maximum marine transgression for the Early Cretaceous of Eastern Venezuela and is a potential source rock. The stratigraphic column is located east of Pico Garcia where the type section of the Garcia Formation outcrops in a continuous manner (see Geologic Map).

Understand different remote sensing data and apply it to petroleum exploration. Use remote sensing techniques to identify geomorphic and structural characteristics of the surface geology exposed over a larger geographic area.

As a Geologist in the New Ventures Team for Beta Exploration, Inc., your assignment is to use remote sensing data to evaluate new hydrocarbon exploration opportunities on the western edge of the Barinas-Apure Basin in Venezuela (see Location Map).

After the Landsat satellite photo imagery is processed, analyze the Landsat image at a 1:100,000 scale and radar images provided in References and Field Data to interpret the geomorphology and the related surface geologic features of the area:

1. Locate drainage patterns based on the surface hydrology.

2. Identify geomorphic features including valleys, terraces, and alluvial fans.

Understand the differences between coordinate systems and the variables that define them. Recognize the need to convert data from one system to another. Determine the most appropriate cartographic system for the area of interest.

Learning Objective:

Distiguish between different coordinate systems.

List variables necessary to define a coordinate systems.

Identify strengths and weakness of different coordinate systems.

Descripe work flow to establish coordinate system of different data types.

Describe the Global Positioning System and how it is used in determining geodesic positions.

Review and convert cartographic data and maps to the most applicable geographic system.

Assignment Instruction:

In this assignment, Beta Exploration Inc. has assigned the New Ventures Exploration Team to select the geodectic coordinate system for an area where they wanting to shoot a new seismic survey for exploration purposes. You need to understand geodetic coordinate systems; the following two projects will help with your understanding:

Create a geodetic survey to help analyze and interpret field data used to make a geologic map of Mexico

Develop a topographic survey in the Eastern part of Venezuela to place shot point and receiver for a seismic survey

You will establish the coordinate system for the two areas, taking into consideration the legal and technical standards of the two coordinate systems. Your boss has asked for transformation, precision, and specific ties to be verified by horizontal and vertical control points.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Understand principles and techniques of magnetostratigraphy, chemostratigraphy and radiometric dating. Describe the practical application of these techniques in non-fossiliferous rock units. Explain how they provide pertinent information in petroleum exploration.

Learning Objective:

Describe the basic principles and techniques used in magnetostratigraphy.

Describe the basic principles and techniques used in chemostratigraphy.

Describe the basic principles and techniques used in radiometric measurements.

Demostrate an understanding of the geologic reasons to apply these techniques.

Incorporate these dating techniques with outcrop and surface geological maps.

Recognize uses and limitations of gravity, magnetics and electromagnetic (EM) methods of exploration. List survey design criteria for each technique. Estimate the thickness of the sedimentary section of a basin using different data types.

Learning Objective:

Describe the basic principles and tools used in gravity, magnetic and electromagnetic techniques.

Identify main exploration application for gravity, magnetics and electro-magnetic surveys.

Potential Fields (Gravity, Magnetism and Electromagnetic) data are very often neglected as an exploration tool.

In the early history (1900 to 1960) of the petroleum industry, these methods played a significant role in the discoveries of most of the reserves already consumed worldwide. These discoveries included almost 100% of the onshore fields in Texas, California, Russia, Iraq, Iran, Saudi Arabia and Venezuela, which are still under exploitation today.

Since the 90′s, an integrated interpretation (using gravity, magnetism, seismic, well and outcrop data) is the common standard in many major O&G companies.

Electromagnetic methods were the preferred tool of choice used by the Russians in the exploration and discovery of its vast reserves until the 70`s, using either magneto-telluric or conventional arrays. Also, in the present, electrical methods are used to detect aquifers which are of interest for water formation disposal and /or CO2 sequestration.

In this Assignment, you will play the role of a Geophysical advisor to diverse E&P teams within your company. Your duties will include:

Defining the feasibility of gravity and/or magnetic surveys (establishing if a given geological configuration is detectable using gravity and/or magnetic measurements)

Defining parameters for gravity data acquisition and processing

Interpreting gravity and/or magnetic data in order to detect and characterize causative bodies (basement and/or within the sedimentary section), and for establish next steps in exploration

PLAN: Seismic Methods

Scenario

The seismic methods Learning Plan offers a brief summary of some of the more commonly used seismic techniques and interpretive methods. The aim of this plan is to provide a practical guide focusing on the connection between geology and seismic sections. We will begin with seismic reflection methods which depend on the generation and detection of acoustic waves. Reflection of energy takes place at boundaries between sediment/rock layers of differing acoustic impedance contrast. Reflected energy is detected by receivers and processed electronically to improve the signal/noise ratio. Returning signals from each shot are displayed against time as one line across a seismic record, time zero being at the shot instant. Successive shots are display as adjacent lines/scans on the recorder, building up a profile. This profile is then manipulated to enhance the geological features through experimentation with processing parameters and the data is converted to depth in order to make accurate drilling location proposals.

Task Summary:

This learning plan is designed for you to use some of the same data from exercise to exercise, imulating real world techniques. We suggest that you keep notes of your work and answers. The exercises are set up to mimic real life situations in an oil and gas company.

In this learning plan you start with the basics of seismic data acquisition; you learn about issues you will face and how to use existing data to start your research. You learn about the instruments involved in a geophysical shoot and how to design the survey for optimum signal/noise ratio. You will learn how to process the data, from removing bad data to enhancing good. The processed data is used for interpretation and you will learn what attributes are best for the different areas of study. And you will finish by creating a seismic cube which can be transformed into a structural map to give to management for determining future drilling or seismic surveys.

Select the most favorable seismic acquisition configuration for the area of interest. Select source and receiver array for proposed survey. Evaluate trade-off between 2D and 3D acquisition for the exploration objective.

Learning Objective:

Understand the primary principles of seismic survey design.

Identify the basic concepts and field operations involved in seismic data acquisition.

Contrast differences between 2-D and 3-D acquisition.

Describe key elements of marine vs. non-marine acquisition.

Evaluate horizontal and vertical seismic resolution.

Evaluate practical considerations in survey design.

Assignment Instruction:

You are a member of the geophysics E&P team for Acme Inc. Your team is presently involved in the seismic data acquisition process in Bass Basin, offshore Australia.

Seismic prospecting is one of the most widespread tools for hydrocarbon exploration based on its ability to describe structurally the area of interest or obtain acoustic (sometimes elastic) response of the rocks and fluids contained within. Seismic acquisition represents more than 80% of the exploration financial investment. Therefore, good survey design is crucial not only for the quality of the image but also for economical reasons.

In this scenario you will design a simple 3D marine seismic survey based on an initial geological description and some basic seismic information. The main parameters for this design are:

Areal extent of the survey

Line length

Migration aperture

Line interval

Group interval

Shot interval

Vertical and horizontal resolution

Basin depositional models indicate that probable reservoir sands are within the oil window, giving deep unexplored portions of the Bass basin considerable petroleum potential. The survey objective is to highlight all Paleocene formations through the area with 48 fold coverage near structural traps. For this exercise the complexities of shot interval calculation due to vessel speed and air-gun recovery are not taken into account.

The Assignment Pages should be done sequentially as all answers can be used as input for subsequent questions; take note of all your findings while completing this exercise.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Describe different types of seismic sources, receivers and their applications.

Identify the most common types of recording instruments.

Identify the most common types of restrictions that limit configuration of a seismic program.

Describe different data formats for the acquisition process.

Propose a work flow to monitor and maintain quality control over seismic acquisition procedures.

Assignment Instruction:

Subsurface seismic imaging involves wave generation and wave recording, usually at surface level and quite complex because targets are several kilometers deep. You need a strong and clean signal (emission and reception) to enhance your subsurface image. However, the amount of seismic information can easily exceed the terabyte size and there are many noise sources which degrade the quality of the seismic data. The instruments you select must be adequate to topographic and environmental conditions to obtain the best possible signal/noise ratio.

In this assignment you have been requested to analyze an area for environmental, topographical, and cultural considerations affecting a seismic survey. You will propose the best source/receiver configuration for the survey.

Specifications and descriptions for available seismic equipment are located in Reference and Field Data. It is strongly suggested to read this material before attempting this exercise. You can also save the information on your hard drive to keep it easily available.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Describe possible shooting solutions for seismic acquisition in an existing field with obstructions.

Describe exploration reasons for shear wave acquisition.

Assignment Instruction:

Seismic survey design is a complex task. In addition to wave propagation, survey design depends on costs, logistics, safety regulations, environment, and geographical settings. The design for a particular survey should take into consideration all geological and geophysical requirements as well as the survey environment. A successful seismic survey design not only generates a good seismic image of the subsurface but does so economically, safely, efficiently, and as environmentally friendly as possible.

In this assignment your responsibility is to make decisions regarding the design of three seismic surveys:

Project #1: A seismic survey in a transition zone.

Project #2: A seismic survey in an area with obstructions

Project #3: A shear wave survey in a marine environment

As part of your responsibilities, you will:

Decide which seismic source and receiver type is most appropriate for a specific area.

Decide which operational technique is most suitable for specific areas of a transition zone survey.

Make decisions when faced with operational limitations in a transition zone.

Identify possible shooting solutions when obstacles are encountered.

Decide between telemetry and distributed systems depending on environmental factors.

Identify important aspects of shear wave acquisition.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Design the seismic processing sequence by selecting the appropriate processing methods. Perform the data processing and quality control, and work with the interpreter to make sure that the outcome truly reflects the geological characteristics of the area.

Learning Objective:

Describe the basic seismic processing sequence from pre-processing and deconvolution through stacking and velocity analysis, to migration and post-processes.

Understand the application of different types of deconvolution, velocity analyses, and migration techniques.

Review processing steps in the context of the objectives of the seismic interpretation.

Assignment Instruction:

Reflection seismic methods, as part of the seismic data processing process, are the tools of choice for hydrocarbon exploration because they can give an image of the subsurface and its structural and sometimes, stratigraphic features. Seismic data processing is the cornerstone for this image generation from the raw data recorded at seismic surveys. Different processes are applied to improve the quality of the image, not only for the purpose of interpretation but also for extracting acoustic and elastic information from seismic sections or volumes.

This assignment introduces you to the basic theoretical concepts and its applications at different seismic processing stages.

During this exercise you will process a 3D onshore seismic survey.

The survey area is about 500Km2 with low structural complexity.

One well is drilled in the survey.

The target is around 3 seconds two-way travel time.

The seismic source used was dynamite.

From previous 2D seismic information, the main faulting system is extensional with some half-graben interpreted.

Your task is to go through the QC (Quality Control) of a processing sequence applied to seismic data.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Identify the applicability of a wellbore seismic program for the exploration objective.

Acquisition configurations for different wellbore seismic techniques.

Describe the acquisition and QC of the check shot survey / VSP.

Describe the generation and QC of a synthetic seismogram from well logs and check shot data.

Assignment Instruction:

Surface seismic is the tool of choice for reservoir delineation. However, the generated image is always an offset-time image. In order to obtain an offset-depth image (which corresponds to a more accurate subsurface picture) several techniques have been developed. Synthetic seismograms, check shots, and VSP (Vertical Seismic Profile) surveys are some of these techniques.

This assignment introduces you to synthetic seismograms generation and how it correlates with seismic data. You will also develop a VSP project in which you will learn the usefulness of seismic-well calibration.

You are assigned to two different projects for the Upstream Technology Group, Inc. (UTC). The project descriptions are:

Synthetic Seismogram Building and Seismic-Well Calibration: In an exploratory block a 3D seismic survey has been acquired. Only one well has been drilled (Well UTC-1X). This well has a total depth of 6390’; GR, density, and DT logs were run from 4000’ to final depth. An T-Z table was obtained using a local check shot.

Zero-Offset VSP survey acquisition, processing and interpretation: An offshore exploratory block has 3D prestack seismic data. A successful well has been drilled (Well UTC-1Y) and UTC wants to calibrate the seismic with the well information to give a better picture of the prospecting horizons in their areal extent.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Evaluate seismic sections to interpret chronostratigraphic units and structural elements. Use the techniques of seismic interpretation to pick horizons and faults over an interval of interest. Tie existing well information to the seismic section using a synthetic seismogram. Combine the seismic interpretation and well data to create a seismic time map.

Learning Objective:

Tie well information to the seismic section using the synthetic seismogram or check shot survey.

Identify major reflections in the seismic data set.

Enumerate criteria for picking faults based on the regional structural style.

Describe conformable and unconformable seismic reflection geometry.

Describe the steps to complete a seismic time map.

Assignment Instruction:

Your company is planning to bid on an offshore area. The only information available is 160 Km of 2D seismic and two wells with logs (see below). As a member of the exploration team, you will use this information to evaluate the hydrocarbon potential of the area. You will propose to your management whether or not to bid by providing the seismic interpretation of the area. By mapping structural and stratigraphic features with exploration potential, you will also propose further seismic surveys and/or reprocessing of existing seismic lines as needed.

Interpret a 3D seismic survey using seismic sections and time slices to interpret horizons and faults. Display an understanding of the use of time slices, horizon slices and other 3D techniques play in 3D interpretation.

Learning Objective:

Identify common horizon auto-picker parameters and their effects.

Enumerate criteria for picking faults on time slices.

Describe various 3D survey display options.

Describe creation and uses of horizon slices.

List parameters for amplitude extraction of a 3D horizon.

Assignment Instruction:

Your company is interested in a deep water basin (see map below) that will be up for auction soon. They have assigned you to evaluate the area for future investment. Only four wells have been drilled in the basin, the results were:

Well A: dry

Well B: dry with gas shows

Well C: oil discovery well

Well D: oil and gas discovery well

The first step in your assignment is to analyze structure maps, time slices, and attributes maps/horizons created from the interpretation of two 3D seismic volumes. Once you have analyzed the data, you will:

Use the information to present a structural and stratigraphic framework for the area

Recommend the use of certain techniques to improve the knowledge of the basin

Convey to your company the meaning of seismic amplitudes and the character of the seismic reflection data

Use the available data to propose and support potential prospects in the area

Rank the prospect in economic terms

Scenario Map

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Evaluate seismic attribute sections to enhance conventional seismic interpretation. Identify the seismic effects of a 'bright spot' anomaly and their physical cause. Describe the Amplitude Vs. Offset (AVO) effect and the physics that govern the response. List the attributes of the Hilbert Transform and their mathmatical formulation.

Surface seismic is the most important tool for delineating a reservoir. In the past, most of the effort was focused on structural imaging. However, due to the advances in computational hardware and new theoretical approaches to sedimentation processes and wave phenomena, seismic attribute analysis has become a major focus for locating hydrocarbon indicators. AVO, amplitude analysis, frequency decomposition, wave attenuation, and elastic inversion are only a few techniques which transform wave information into hydrocarbon indicators. The following assignment teaches us the importance of attribute characterization.

Your team is working in a gas prone area. Two exploratory wells have been drilled in the area; the first well is located over a structural high and successful and the second is located down dip and dry. Drilling plans and locations for both wells were planned using 2D conventional seismic. A new 3D seismic survey was acquired in order to give a better picture of the gas-water contact distribution. Interpretation uses seismic attributes as hydrocarbon indicators.

The main target is the reservoir discovered by the first well at 4500’ depth (2000ms, two way time). Other possible reservoirs might exist at 3500ms and 7000ms. You will use the 3D seismic to extract and analyze seismic attributes; you are responsible from the seismic QC to AVO characterization. You will also make a proposal for the potential reservoirs.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

PLAN: Well Logging and Subsurface Mapping

Scenario

The project team is compiling an information database for the Sucre field during this, the appraisal stage of its life. You need to give your ideas on how this database will contribute to the reservoir management task, and what information it should contain.
Meanwhile, drilling has begun at Well 2A5-NE. The team's field geologist is at another location evaluating core material, and so you have been put in temporary charge of this well's open hole logging program.

Task Summary:

Establish general data acquisition requirements for an integrated reservoir study. Select and apply the appropriate tools for an open hole logging survey. Define basic logging parameters, establish log scales, monitor tool responses, and confirm the validity of the acquired log data. Interpret the logs to obtain an initial evaluation of hydrocarbon potential.

Upon completing this Learning Module assignment, the participant should be able to

access PDVSA engineering and geoscience databases and identify information that is relevant to the field under study.

classify information according to discipline and what reservoir parameters it helps to define.

Assignment Instruction:

In this Learning Module, you will establish general
data acquisition requirements for an integrated
reservoir study of the Sucre field. You will consider
both existing and potential data sources, and
determine what information you need to start building
a reservoir model. By the time you complete this
module, you should be able to determine information
needs, identify and access interdisciplinary data
resources, and compile reservoir information based
on the parameters to be defined.

In this Learning Module assignment, the reservoir
is in the early appraisal stage of its life. Its
status at the time of this assignment is as follows:

A structure contour map has been generated from seismic data and interpretations of regional geological data.

Well 4E1-NE, the discovery well, is currently on an extended production test.

Well 5C1-SW tested all water, and was subsequently suspended.

Drilling is in progress on Well 2A5-NE. A conventional coring program has been authorized, and should be getting underway soon.

The reservoir management team is already at work
compiling a database of reservoir information. Your
job in this assignment is to provide some ideas of
what this database can contribute to the task of
reservoir management, and what information should be
added to it.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Select and apply the appropriate well logging tools for a particular set of well conditions and reservoir study parameters.

Learning Objective:

Upon completing this Learning Module assignment, the participant should be able to

select the appropriate logging tool(s) for evaluating a given reservoir prameter, taking into account operating conditions and limitations.

specify procedures, surface equipment, and auxiliary tools to be employed on a logging job.

Assignment Instruction:

In this Learning Module, you will select and apply
the appropriate tools for conducting open hole
logging surveys at Well 2A5-NE, based on well
conditions and formation evaluation objectives.
By the time you complete this module, you should
understand the basic operating principles of
commonly used logging tools and be able to
determine their areas of application.

Conductor casing has been set at Well 2A5-NE,
and the surface hole is currently being drilled.
Your tasks in this assignment are to review the
surface logging program, and then to select the
appropriate tools for logging from Target Depth
to the shoe of the surface casing.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Validate the quality of information supplied by the logging service company to ensure that the data can be used in generating a petrophysical reservoir model.

Learning Objective:

Upon completing this Learning Module assignment, the participant should be able to

monitor the quality control of logging procedures, including calibration, correction and choice of scales)

Assignment Instruction:

In this Learning Module, you will be in charge of
well log quality control at Well 2A5-NE. By the time
you complete this module, you should be able to
define basic survey parameters, establish log
scales, monitor tool responses, and confirm the
validity of the data acquired from commonly used
logging devices.

You are approaching target depth on Well 2A5-NE,
and you will shortly be calling out the service
company crew to log the 8 1/2 inch hole interval.
Your job in this assignment is to establish some
general guidelines for conducting logging
operations, review tool calibrations and monitor
survey progress.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

In this Learning Module, you will use basic well log
interpretation techniques to identify potential pay
zones, define basic reservoir properties and estimate
the hydrocarbons in place in terms of reservoir
volume per unit area. By the time you complete this
module, you should be able to apply log analysis
methods to the task of generating a petrophysical
reservoir model.

The open hole formation evaluation program at Well
2A5-NE is in progress, and field copies of the
lithology, resistivity and porosity logs are now
available. Your job in this assignment is to review
these logs and make an initial evaluation of the
well's hydrocarbon potential. Your evaluation
is an important first step in deciding whether to
complete the well, so be sure to carefully examine
the log data.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Develop geological, petrophysical and sedimentological maps for use in generating a reservoir model.

Learning Objective:

Upon completing this Learning Module assignment, the participant should be able to

generate geologic cross sections from well logs.

draw subsurface contours and construct geologic and geophysical maps.

Assignment Instruction:

The original structure contour map for the
Upper/Middle Sand reservoir was derived from seismic
data acquired from an independent operator. Since
then, three wells have been drilled, and the seismic
data have undergone reprocessing and extensive
additional interpretation. As a result, you now have
a new base map, which shows the locations of the new
wells and depth markers to the top of the Upper Sand.
In this assignment, you will revise the Upper Sand
structure map to reflect these new data (be
careful--the updated map may or may not be similar to
the original map!)

To complete the assignment, you will consider several
additional formation parameters that may be conducive
to subsurface contour mapping, and consider how they
could be used to describe this reservoir.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Elaborate and update from the maps generated during the modeling of the reservoir, the maps required by the Ministry of Energy and Mines in offical format, for the administration and control of the reserves.

Learning Objective:

Upon completing this Learning Module assignment, the participant should be able to

access the applications used to generate MEM maps in official formatt

generate a map using the applciations.

Assignment Instruction:

The Ministry of Natural Resources is a department
of the National Executive of the Republic of Sucre.
Its responsibilities include establishing norms and
regulations for business operations in the hydrocarbon
sector, in accordance with laws established by the
National Legislature.

The Ministry's organization and objectives
are basically the same as those of the Ministry of
Energy and Mines (MEM) in the neighboring Republic
of Venezuela, and the norms that it has established
for oil and gas operations are identical to MEM
standards. For this reason, the questions that you
are asked in this assignment use MEM standards as
primary reference sources.

In this Assignment, you will review the present
status of the Upper/Middle sand reservoir, determine
what reports you need to submit to the Ministry, and
decide how to classify well locations and estimated
hydrocarbon reserves in keeping with established
norms. You will also ensure that the symbols and
conventions used in the official maps that are
submitted with these reports are consistent with
Ministry standards. By the time you complete the
Assignment, you should be able to comply with MEM
standards for reporting reserves and generating
subsurface maps using accepted symbols, conventions
and nomenclature.

The current status of the Upper/Middle sand
reservoir is as follows:

Well 4E1-NE, the discovery well, is on an
extended production test. Permanent completion is
pending.

Well 5C1-SW was suspended after well logs and
a formation test indicated that it exposed the Upper
Sand below the water-oil contact.

Well 2A5-NE has been drilled and tested, and a
successful open hole formation test has been carried
out.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

PLAN: Reservoir Characterization and Modeling

Scenario

Based on a re-evaluation of seismic data, and with the information obtained from recently drilled wells in the Sucre field, your supervisor has asked you to review and, if necessary, revise the structure contour map for the top of the Upper Sand. You will also be doing some additional mapping of an older offset reservoir. Once you complete your mapping assignments-and after examining some issues involving compaction and subsidence in a nearby field-you will re-join the Sucre project team as it works on building a reservoir model.

Analyze, calculate and validate compaction, subsidence and settling parameters to predict their influence on the behavior of the project and their impact on recovery, using the results of this analysis to optimize exploitation projects.

Learning Objective:

Upon completing this Learning Module assignment, the participant should be able to

measure compaction, subsidence parameters.

determine the significanc of these parrmeters with re determining drive mechanisms, etc.

Assignment Instruction:

A sedimentary formation is the product of rock particle deposition, an ongoing process in which an underlying layer of particles is buried and forced downward by succeeding layers. As deposition and burial proceed, the underlying layer is subjected to a progressively increasing overburden pressure. This increased overburden results in compaction--a reduction in the thickness and bulk volume of the underlying layer.

Compaction also takes place when fluids are withdrawn from a subsurface formation. Fluid withdrawal causes a decrease in pore pressure, which in turn increases the grain-to-grain, or matrix pressure of the rock particles and causes them to compact. The amount of compaction that occurs in a given formation depends only upon the difference between the vertically applied overburden pressure and the fluid, or pore pressure. Thus, the uniaxial compaction of a rock sample of thickness h can be expressed as

DVb/ Vb = Dh/h

Depending on geological conditions, subsurface compaction may be associated with varying degrees of subsidence, or sinking of the ground at the surface.

Compaction and its associated effect of surface subsidence can, in certain situations, have significant effects on reservoir management strategies and field operations. In this Assignment, you will build your general understanding of these phenomena and see how they can influence reservoir engineering decisions. You will also look at a system that has been developed by PDVSA to describe and predict compaction and subsidence in areas where they are of particular concern.

By the time you complete this assignment, you should be able to identify situations where compaction and subsidence may be important considerations in a reservoir management strategy, and you should be able to begin using computer-based tools for predicting compaction and subsidence under various conditions.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Analyze and interpret pressure and production
data for incorporation into the reservoir model.

Learning Objective:

Upon completion of this module, the participant should
be able to

review and acquire well test information

validate pressure test information

prepare well test data for analysis

diagnose and interpret the pressure test

design and interpret production records; analyze production behavior

Assignment Instruction:

Well 4E1-NE is the first well drilled in the Upper/Middle
Sand reservoir. The well was completed with 7-inch casing,
selectively perforated and placed on an extended production
test. Testing was conducted in several stages. The first
stage, which is the subject of this assignment, involved
testing 16 feet of interval in the upper portion of the
identified pay intervals. This test was designed to gather
information on reservoir flow characteristics, and in
particular, to determine the nature of a nearby fault that
had been identified on the structure map. Your job in this
assignment is to review the data from this initial test and
evaluate the reservoir permeability, near-wellbore effects
and boundary effects.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Upon completing this Learning Module assignment, the participant should be able to

Establish the areal and vertical distribution of zones with similar behavior in agreement with the reservoir model.

Identify and delineate the rock volumes with sedimentological, petrophysical and reservoir properties that enable hydraulic communication.

Assignment Instruction:

Most reservoirs are not homogeneous. Rather, they
exhibit complex variations in continuity, thickness
patterns and other properties, including porosity,
permeability and capillary pressure. A reservoir is
typically subdivided into zones or areas based upon
differences in rock properties. The complexity of
reservoir rock imposes a challenge to geoscientists
and engineers in applying available technologies and
their experience to improving oil and gas recovery.

The purpose of geological mapping is to identify flow
units that contain oil and gas, and once they are
found, to apply geologic evidence and concepts toward
achieving the most efficient development and production
of these prospects. However, it is important to remember
that these geologic maps are never finished. When new
wells are drilled or old wells are re-examined, new
information becomes available, and the extent and
geometry of flow units must be updated. Original maps
may be based upon a few scattered control points. This
means that in the early stages of geological work, a
careful study of the local area should be made.

Lithofacies maps are quite helpful in defining various
reservoir rock types. The correlation of a number of
reservoir properties, including porosity and
permeability, becomes much more meaningful when applied
to a specific rock type.

During the production phase of a reservoir, more
information about flow units is obtained by transient
well testing and careful monitoring of individual well
performance. Reservoir pressure maps are particularly
useful for evaluating reservoir continuity. The areal
distribution of reservoir pressure in different zones
as a function of time can help us to identify pay
discontinuities and flow barriers. Vertical pressure
profiles are also useful in defining the effect of
vertical permeability within a given reservoir section.

History matching of field performance, using a
numerical reservoir simulator, can provide great
insight into the continuity of flow units and reservoir
properties in inter-well areas where there is no
measurements. In this process, the geological properties
such porosity, permeability and pay continuity are
changed in order to match the observed field performance.

Different steps in gathering data for flow unit
determination are:

In the geological phase:

General reservoir configuration

Fluids distribution

Continuity and thickness

Rock type, porosity and permeability cutoffs

Fluid contacts

Vertical stratification

During the production phase:

Logging

Well performance

Well testing

Relative permeability, capillary pressure and wettability tests

Inter-well tracers

In this assignment, you will be taking a short break
from your work in the Sucre field, while the geologists
on the reservoir management team prepare an analysis of
some of the information that has been gathered so far
from the upper/middle sands. During this time you will
work on identifying the flow units within another
reservoir where your company is actively involved in
the Nuri formation.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Apply analytical and numerical simulation techniques to the development, testing and refining of a reservoir model, and the generation of an optimal reservoir exploitation plan.

Learning Objective:

Upon completion of this module, the participant should be able to

define reservoir simulation objectives

define simulator geometry and dimensions, and assign flow equations to the proposed model

define simulator grid and boundary conditions

compile reservoir model input parameters

develop finite-difference approximations to solve the flow equations

plan numerical simulation computer runs and interpret the results

use simulation results to determine the optimum exploitation scheme

Assignment Instruction:

A typical reservoir simulation study is conducted in
four stages:

Gather all relevant reservoir data.

Initialize the developed model.

Validate the model using a history matching process.

Forecast the reservoir's future behavior.

Once the structure, thickness, porosity and
permeability maps are obtained, the data need to be
discretized according to the gridding system used.
Fluid properties are entered into the model either
using a data table or in the form of a correlation.
For multi-phase flow problems, relative permeability
relationships and capillary pressure curves also need
to be obtained.

Models are typically initialized with respect to the
water/oil or gas/oil contact depths and a reference
datum-level pressure value.

For the initialization, the simulator is run until
the hydrostatic equilibrium of the existing phases is
established.

Validation of the model requires a detailed
production history of all wells in the reservoir. The
production data should contain information about open
intervals, well stimulations and production rate of
each phase (oil, gas, water).

After the model is history matched against the
existing production data, it can be used to predict
future reservoir behavior for different development
scenarios.

Keep in mind that these predictions are only as good
as the basic input that was entered into the model.

Your assignment here is to gather all the iso-surface
maps and fit a body-centered grid on top of the
reservoir structure.

You also need to collect all the PVT data that will
be used during the simulation.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

PLAN: Reservoir Description and Characterization

Scenario

Beta Petroleum is drilling the Gama 1 petroleum exploration well on the Gama Structure in the New Basin. If the "wildcat" exploration well is successful, three additional appraisal wells may be drilled to delineate the structure and characterize the reservoir. The learning module assignments will use well logs, geologic samples, geophysical data, and geostatistical methods to evaluate the reservoir quality, size, continuity, and petroleum reserves to determine if the Gama Structure can be developed into an economic hydrocarbon field.

Task Summary:

Prepare an exploration well logging program and use the logs to calculate basic petrophysical parameters of petroleum reservoir.

Interpret well logs and samples to direct an appraisal well drilling program to define the extent of petroleum reservoir.

Estimate original hydrocarbons in place with well logs and a geological reservoir model.

Analyze and interpret seismic and geological data to help describe a reservoir.

Use statistical methods to describe and characterize the hydrocarbon-bearing reservoir.

Prepare a logging program for a petroleum exploration well. Determine lithology and pore fluid properties using open hole wireline logs, mud logs, wireline formation tester samples and side wall samples. Use log data to calculate petrophysical properties of a petroleum reservoir including clay volume, porosity, and water saturation.

Understand the operating principles, capabilities, limitations and uses of common open hole logging devices.

Describe basic response and limitation of each log curve type.

Determine the petrophysical parameters of a petroleum reservoir: lithology, clay volume, porosity and water saturation.

Assignment Instruction:

Beta Petroleum is planning to drill an exploration well on the Gama structure in the New Basin (see location map). As the Operations Geologist, you will consult with the Petrophysicist to:

Develop a data acquisition program (mud-logging and wireline logging) for the Gama 1 well.

Understand Quick Look evaluation of log responses for a variety of lithology and pore fill possibilities.

Use Quick Look evaluation of the Gama 1 well logs to select wireline formation tester (WLFT) pressure measurement and sample points and to select side wall sample (SWS) depths. You will interpret the fluid distribution in the well and determine the petrophysical parameters of the petroleum reservoir: clay volume, porosity and water saturation.

Apply the petrophysical principles from the Background Knowledge Selector to the Quick Look test log and to the Gama 1 logs provided in References and Field Data to complete each assignment.

Location Map of Gama Structure

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Use resistivity, radioactive, acoustic, other wireline well logs, and well samples and cores to interpret stratigraphic and petrophysical characteristics of subsurface formations. Determine basic petrophysical properties and extent of potential petroleum reservoirs.

Learning Objective:

Describe common log responses for source, reservoir and seal units

Describe common log patterns that define reservoir fluid content

Calculate clay volume, porosity and water saturation from well logs in appraisal wells Gama 2, 3, and 4

Apply log interpretation methods and core information to determine porosity, permeability, and boundaries of the petroleum reservoir on the Gama Structure

Validate log response using core and well cuttings.

Assignment Instruction:

Beta Petroleum has drilled the exploration well Gama 1 on the Gama structure in the New Basin. As the Operations Geologist, you have carried out the initial Quick Look evaluation of the well logs at the wellsite.

Based on the log interpretation results of Gama 1, you will make recommendations to company management regarding production testing of Gama 1 and the appraisal strategy for the Gama structure. Base your recommendations on the geology, depositional environment and uncertainties associated with the Gama structure.

You will be on the well site for the drilling and logging of each appraisal/development well. You will make the initial interpretation regarding the fluid distribution in each well and calculate clay volume, porosity and water saturation. Based on the results of each well, you will make recommendations to management on further drilling to determine the extent of hydrocarbons in the Gama Structure.

Gama Structure with well locations

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Define a petroleum reservoir in terms of depostional environment, lithology, continuity and thickness of reservoir sands, and structural geometry to generate a geological reservoir model of the Gama Field. Estimate the original oil volume in place by using petrophysical parameters developed from well log analysis and the Stock Tank Original Oil In Place - STOIIP calculation.

Learning Objective:

Interpret well log, core, and pressure data for a petroleum reservoir model

Integrate depositional facies, their distribution, and the reservoir architecture into a geological model of the reservoir

Determine petrophysical properties of reservoir sands including Net to Gross ratio of net reservoir sands to total reservoir thickness, porosity, and oil or gas saturation

Estimate original hydrocarbons in place of the Gama Field

Assignment Instruction:

Beta Petroleum drilled the Gama 1 "wildcat" discovery well and three appraisal (delineation) wells (Gama 2, Gama 3 and Gama 4) on the Gama structure in the New Basin.

The discovery well found oil and gas in the Lower Graben Sand Formation but only defined the oil down to (ODT = lowest known hydrocarbons) depth and water up to (WUT = highest known water) depth. Gama 2, the 1st appraisal well, defined the oil/water contact (OWC). All of the wells have been logged and a whole core was taken of the reservoir in Gama 3. Gama 3 and 4 penetrate the same hydrocarbon bearing reservoir and display similar fluid contacts as Gama 1 and 2, but this needs to be verified using the available pressure information.

As the Exploration Geologist, develop a static reservoir model and determine the oil in place (Stock Tank Original Oil In Place - STOIIP) for the Lower Graben Sand Reservoir of the Gama Field:

1) Interpret flow units in and between each of the Gama wells to assess the reservoir properties across the Gama structure. The Lower Graben Sand can be sub-divided into 4 Flow Units each with different properties based on a type log from well F2-2A (Ref. 3448) located 8.6 km to the northwest. The top of the Lower Graben Sand is picked at the occurence of the first large sand beds below the marine shales of the Middle Graben Shale package.

2) Determine the local, or prospect depositional environment from well logs and with core data from Gama 3. Based on regional information, the Lower Graben Sand is interpreted as a fluvial-deltaic to a tidal delta depositional system, building out in a northern direction. The Lower Graben Sand is subdivided into four "Flow Units":

tidal distributary channel fills,

tidal channel bars,

channel margins and

lagoonal backwash systems.

3) Using the depositional environment, define the reservoir continuity of the individual permeable and non-permeable beds defining the “flow units” that control the direction of fluid flow through the reservoir into the producing wells. In the fluvio-deltaic/tidal distributary environment for this scenario, the width/thickness ratio of the sand bodies is 100 and the length/width ratio is 5.

4) To calculate the STOIIP, review the structure map of top of Lower Graben Sand in Gama Field (below and Ref. 3465) derived from well and seismic data. The structure is faulted, displays 4 way dip-closure, and appears to be filled to spill point. The crest of the structure is at 3025 m and is located northwest of the discovery well. The structure is broken up by two sets of normal faults, forming a NW-SE trending 1.5 km wide Triassic-age crestal graben. Younger north-south trending faults break up the eastern and northeastern flanks of the field. The throw of the faults varies from 10 - 85 m. The faults are partly sealing and may control some compartmentalization of the field. Variations in reservoir properties can be distributed across the structure to cover uncertainties in the subsurface model. However, in this module the average properties found in the wells will be used as input in the volumetric calculation of oil in place.

Specific information to complete the following assignments are listed in each Assigment Instruction and located in References and Field Data.

Structure Map of top of Lower Graben Sand in Gama Field

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Analyze and interpret seismic and geological data to help describe a reservoir. Convert seismic time horizons to depth, based on well and seismic velocities. Evaluate seismic facies and their depositional environment to produce analogs of a potential reservoirs.

Learning Objective:

Analyze seismic interpretation to determine best methodology for depth conversion

Present Pros and Cons of different depthing approaches

Select depositional model analog that best fits the regional and seismic facies characteristics

As the geophysicist you have to generate depth maps for the development of a reservoir, drilled by a number of wells.

Firstly you have to make a correlation between well information and surface seismic data. For this you will have to generate synthetic seismograms.

Next you will have to decide on the strategy for depth conversion, for which you will have to consider various options and types of data. You will have a 3D dataset complete with stacking velocities.

Lastly, you will have to consider using available VSP data.

Setting the scene

In the development of hydrocarbon resources, many disciplines play important roles. Typically a reservoir is considered for development if commercial volumes have been established by exploration and appraisal wells.

Even though circumstances may be different in various countries and within different operating companies, a common sequence of events can be distinguished.

Once a new reservoir has been identified the seismic 3D/2D is re-interpreted. Possibly after it has been reprocess using the new subsurface information. All available well data is integrated in the seismic evaluation, together with up-to-date laboratory and petrophysical analyses.

This module treats this sequence of seismic evaluation.

In parallel a careful review is being made of all geological data. By the time the seismic evaluation is yielding its first results, geologists and geophysicists should have jointly create reservoir models. In this phase a feedback loop between the team members is essential to define the interwell geometries and continuity of the productive strata.

In this assignment you will explore the various techniques and working practices of all peripheral, yet vitally important, activities around seismic interpretation itself, starting from basic principles.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Use statistical methods to describe the characteristics of the hydrocarbon-bearing system. Validate the description by comparing data with reservoir analogs. Establish supporting trends for predicting properties in both drilled and non-drilled areas. Characterize dependence among multiple variables. Describe risk and uncertainty using probabilistic distributions.

Beta Petroleum has drilled a wildcat (Gama 1) and three delineation wells (Gama 2, Gama 3, and Gama 4) on a structure in the New Basin. All of the wells have been logged and a whole core taken of the reservoir in Well # 3 and conventional core analysis undertaken on 10 plugs. A facies Scheme has been developed.

You are to:

Extend and extrapolate the well data across the field, by creating maps of petrophysical properties, for the purpose of developing a static reservoir model

Assist in the refinement of the facies model, by investigating possible scenarios consistent with the data and interpretation, to provide a framework for the properties;

Using this model (properties and geometrical framework) to predict likely bounds on the oil in place

Extend this work to the development of a preliminary dynamic model, including fluid flow characteristics

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

PLAN: Wellsite Geological Operations

Scenario

Beta Petroleum is drilling the Gama 1 exploration well on the Gama Structure in the New Basin. If the "wildcat" exploration well is successful, three additional appraisal wells may be drilled to delineate the structure and to help with the economic evaluation of the discovery. The Wellsite Geological Operations learning plan will focus on both the Prospect Geologist duties and the Well Site Geologist duties during the exploration, appraisal/delineation, development and production drilling phases of the Gama Field project.

The Prospect Geologist will use a Database to rank prospects and recommend a prospect for drilling and then prepare a well proposal.

The Well Site Operations Geologist will oversee the day to day geological operations of all wells. Responsibilities include determining monitoring and data collection programs, contract supervision, communication with management, the subsurface team, and the drilling team, and applying the reservoir geological model to the preparation of the Field Development Plan.

Task Summary:

Determine the necessary geological and operational resources for carrying out an exploratory drilling project.

Understand the data collection responsibilities of the Well Site Operations Geologist for exploration and appraisal wells.

Make decisions in the delineation, development, and production phases of the Gama Field

Determine the necessary geological and operational resources for carrying out an exploratory drilling project. Build a drilling plan to address permitting, environmental and safety considerations, location construction, contracts, evaluation and specialized services. Balance the cost versus the benefit to the company in all the aspects of the drilling program to make the best possible decisions.

Learning Objective:

Assemble Database to rank prospects and recommend a prospect for drilling

Coordinate the drilling plan and construct a timeline for all drilling activities.

Collect and evaluate requests for exploratory well data and evaluate impact on budget.

Prepare data collection program for exploratory well.

Tender required services to the industry at large and award contracts for exploratory services.

Assignment Instruction:

In this scenario, assignments will be given to both the Prospect Geologist and the Well Site Geologist. Beta Petroleum is drilling the Gama 1 "wildcat" exploration well on the Gama structure in the New Basin. If this first exploratory well is successful, three additional appraisal wells may be drilled to determine the potential size of the discovery. As both the Prospect Geologist and Well Site Geologist in charge of well site geological operations, you will be involved in all stages of the exploratory drilling program. You will:

Use a Database to rank prospects and recommend a prospect for drilling

Develop a data acquistion plan, monitor drilling, and report progress to management and the exploration team.

Understand the objectives for the successful drilling and evaluation of the well. Respond to exploration data requests, evaluate data and distribute the information to management at company headquarters.

Coordinate the drilling plan. This includes location confirmation, permitting, site preparation, coordination and communication with the drilling engineers, the drilling contractor and the contractors providing data collection services. Construct a timeline for all drilling activities.

Tender the drilling services to select contractors.

Prepare a budget and track overall cost and cost of operational expenditure areas for the Exploration Manager.

Plan for contingencies with alternatives for the drilling and evaluation program that still conform to the overall objectives of the well.

Refer to materials in References and Field Data and read topics in Background Knowledge as needed to complete the assignments.

Proposed Gama 1 Well Location on Gama Structure Prospect Map

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Understand the data gathering responsibilities of the Well Site Operations Geologist during drilling operations. Design well logging programs and other data collection programs (e.g. coring) for exploration and appraisal/development drilling programs. Determine the necessary evaluation programs to collect data for a Reservoir Geological Model.

Propose evaluation programs for appraisal wells after exploration discovery well

Assignment Instruction:

Beta Petroleum is drilling the Gama 1 "wildcat" exploration well on the Gama structure prospect in the New Basin. If this first exploratory well is successful, three additional appraisal wells may be drilled to determine the potential size of the discovery. As the Well Site Operations Geologist you will be involved in all phases of the drilling program:

Understand the objectives of the wells and subsequent evaluation programs.

Design well logging programs and other data collection programs (e.g. coring) to collect data for a Reservoir Geological Model.

Monitor and report progress on the drilling of wells to management and the exploration team.

If the Gama 1 well has hydrocarbons and reservior based on mud log and drilling results, determine the changes needed to the initial data collection program.

Describe the priority of additional evaluation data to balance enhanced evaluation requests with available funds in the budget.

Propose data acquisition and evaluation programs for appraisal wells.

Refer to materials in References and Field Data and read topics in Background Knowledge as needed to complete the assignments.

Proposed Gama 1 Well Location on Gama Structure Prospect Map

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

The Exploratory and Delineation Drilling module will primarily focus on the role and responsibilities of the Well Site Operations Geologist in the delineation and field development phases of the Gama Field.

Learning Objective:

Evaluate results from exploration and appraisal/delineation wells and update the database.

Understand the drilling problems encountered

Make recommendations for well designs, mud programs, and casing and cement designs

Determine well completion options

Prepare a Field Development Plan for the economic life of the field.

Assignment Instruction:

Beta Petroleum has drilled the Gama 1 "wildcat" exploration well as a discovery on the Gama structure prospect in the New Basin. Three additional appraisal wells have also been drilled to determine the potential size of the discovery. The Well Site Operations Geologist will now:

Evaluate all well test results based on objectives of the well and subsequent economic evaluation program.

Understand and make recommendations to the well design, the mud program, and the well completion methods.

Update and maintain the Reservoir Geological Model.

Prepare the Field Development Plan for the Gama Field in coordination with the subsurface team and company management.

Refer to materials in References and Field Data and read topics in Background Knowledge as needed to complete the assignments.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

PLAN: Reservoir Surveillance

Scenario

Your project team has generated geological and petrophysical models for the Sucre project and incorporated them into a reservoir model. Your next step is to obtain additional reservoir data, and use it to validate and, if necessary, refine your models to reflect actual reservoir behavior.

Task Summary:

Establish a plan for acquiring and optimizing information for reservoir surveillance. Employ multidimensional seismic information and geological data as reservoir management tools. Use production records, well logs, core analyses and other data. to update the geological and petrophysical models of the reservoir. Incorporate new data into the reservoir model, and refine the model by reconciling differences between predicted and actual behavior.

Acquire and analyze the necessary data for optimizing reservoir surveillance.

Learning Objective:

Upon completion of this module, the participant should be able to acquire and analyze pressure data, PVT reports, production records, injection records, production tests, fluid sampling, injectivity tests, and other information for the purpose of monitoring reservoir behavior.

Assignment Instruction:

Reservoir surveillance is a process of identifying,
gathering and interpreting the information needed to
effectively manage the reservoir and maximize economic
hydrocarbon recovery. This process become more and more
critical as a field passes through the various phases of
primary, secondary and enhanced recovery.

In this assignment, you will plan a data acquisition
program for the Upper/Middle Sands that includes the
following elements:

Present and future objectives

Data requirements

Data sources

Acquisition methods

Interpretation of collected data

By the time you complete this assignment, you should be
able to acquire and analyze pressure data, PVT reports,
production records, injection records, production tests,
fluid sampling, injectivity tests, and other information
for the purpose of monitoring reservoir behavior.

The exploration/appraisal program for this reservoir
is currently in its third year. So far, four wells have
been drilled: 4E1-NE, 5C1-SW (suspended), 2A5-NE and
5A1-SW.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Integrate multidimensional seismic information and geological data to optimize the processes of reservoir monitoring and exploitation.

Learning Objective:

Upon completion of this module, the participant should be able to establish a basis for integrating geophysical and geological data and incorporating them into the reservoir surveillance program.

Assignment Instruction:

Reservoir surveillance is a process of gathering and
analyzing the information necessary to control operations
and maximize the economic recovery of hydrocarbons.
Geologists and geophysicists play a key role in this
process, from early exploration and appraisal to the
mature stages of production.

In this assignment, you will consider how various
geological and geophysical tools can be used for reservoir
monitoring, and determine their applicability to the
surveillance program for the Upper/Middle Sands.

By the time you complete this assignment, you should
be able to establish a basis for integrating geophysical
and geological data and incorporating them into the
reservoir surveillance program.

The exploration/appraisal program for this reservoir
is currently in its third year. So far, four wells have
been drilled: 4E1-NE, 5C1-SW (suspended), 2A5-NE and
5A1-SW.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Upon completion of this module, the participant should be able to apply information from newly acquired well logs, core samples and other data sources to refine the geological model of the reservoir, including its structure, stratigraphy, dimensions and boundaries.

Assignment Instruction:

The geological model is a basic element of any reservoir
description. It characterizes such parameters as reservoir
structure, stratigraphy and dimensions based on logs, core
analyses and other data. These parameters are essential
to estimating hydrocarbon-in-place and reserves potential.

In this assignment, you will review available information
from the Upper/Middle Sands and compare it with the present
geological model. You will then revise the geological model
as necessary. Based on your interpretations, you will
develop important insights into the reservoir continuity
and depositional environment, and establish or confirm the
reservoir limits.

By the time you complete this module, you should be able
to apply information from well logs, core samples and other
data sources to refine the geological model of the reservoir,
including its structure, stratigrapy, dimensions and
boundaries.

The exploration/appraisal program for the Upper/Middle
Sands has been completed, and the reservoir is currently
entering its first development year. Wells drilled and
evaluated to date are 4E1-NE, 5C1-SW (suspended), 2A5-NE,
5A1-SW and 5A2-SE.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Upon completion of this module, the participant should be
able to use well logs, cores, correlations and other tools
to establish the distribution of petrophysical properties
in the reservoir.

Assignment Instruction:

Reservoir quality is determined primarily by the
distribution of petrophysical properties such as porosity
and permeability, pore size distribution and pore geometry,
and the presence of pore-filling materials that may have
an effect on productivity or hydrocarbon recovery
efficiency. Other important factors, such as relative
permeability and capillary pressure relationships, are
related to rock wettability and capillary pressure effects.
Thus, in order to fully describe reservoir quality, it is
necessary to have a knowledge of the composition and
characteristics of the reservoir fluids, as swell as the
rock pore system.

In this assignment, you will determine reservoir
properties for input into the Upper/Middle Sands
petrophysical model. By the time you complete this
assignment, you should be able to use well logs, cores,
correlations and other tools to establish the distribution
of petorphysical properties in the reservoir.

The exploration/appraisal program for the Upper/Middle
Sands has been completed, and the reservoir is currently
entering its first development year. Wells drilled and
evaluated to date are 4E1-NE, 5C1-SW (suspended), 2A5-NE,
5A1-SW and 5A2-SE.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Incorporate new production data (selective &
differential) into the reservoir model, along with new
information from well/core analyses.

Refine the reservoir model based on differences
between predicted and actual pressure and production data.

Assignment Instruction:

A preliminary reservoir model of the Upper/Middle Sands
was generated during the exploration/appraisal period.
In this assignment, you will review the most current
available data and history-match the reservoir’s actual
performance with that predicted by the original model.
Based on the results of the history match, you may choose
to modify one or more of the following parameters:

Data summary

Grid data

Thickness data

Porosity data

Permeability data

Saturation data

With this updated reservoir model, you can test
different exploitation scenarios to determine which one
results in the optimal economic recovery.

The field is presently under development, during which
time it has been placed on limited production. Active
wells include 4E1-NE, 2A5-NE, 5A1-SW and 5A2-SE.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

PLAN: Reservoir Development Strategies

Scenario

Based on its reservoir model, your project team has developed several exploitation strategies. In this Learning Plan, you will evaluate these strategies economically with the goal of finding out which one represents the most attractive investment opportunity. In addition to fiscal considerations, you will have to account for such details as work programs, budgets, permitting requirements, personnel matters and regulatory compliance issues. You will be looking beyond the reservoir's primary production phase and developing plans for improved recovery. In each of the Learning Plan assignments, you will be asked to make management and control decisions to ensure project success.

Task Summary:

Use economic evaluation methods to select an investment opportunity and formulate a project budget. Prepare the required permission requests for drilling, workover/recompletion, stimulation, abandonment and well servicing operations to satisfy the established legal requirements of regulatory organizations. Properly apply health, safety and environmental regulations to the task of reservoir management. Optimize reservoir management/control decisions using surveillance techniques, information and technology systems, and technical and financial indicators. Develop an improved recovery scheme for a reservoir.

Use economic evaluation methods to select the most profitable project and/or exploitation strategy, and formulate a project budget.

Learning Objective:

Upon completion of this module, the participant should be able to apply economic evaluation techniques that are necessary for analyzing proposed long-range exploitation strategies and/or projects in the areas of reservoir, drilling and production.

Assignment Instruction:

Based on reservoir model and well performance predictions that were generated during the exploration/appraisal period, the reservoir management team is currently looking at 3 potential development scenarios for the primary recovery stage:

Case 1a

Case 2a

Case 3a

MDR (Maximum Design Rate)

7500 STB/D [1193 m3/D]

15000 STB/D [2385 m3/D]

22500 STB/D [3578 m3/D]

Exploration/appraisal wells to be completed

4

4

4

Additional wells to be drilled and completed

1

6

11

Total number of wells

5

10

15

The simulator runs used to generate these cases were based on the following assumptions:

Volumetric (closed pressure boundary) reservoir.

Production begins in the first production year at the MDR, even though the reservoir actually produced at low rates under test conditions during the exploration/appraisal stage.

Average initial production per well = 1500 STB/D [apx. 240 m3/D]—under the assumed reservoir parameters, this appears to be the maximum natural flow rate that is sustainable for a significant time period.

In this assignment, you will compile the available information and generate net discounted cash flow predictions for each of these cases. You will then evaluate each case in terms of its primary economic indicators, taking into account the sensitivity of the evaluation to uncertainties in the input parameters.

NOTE: An MS Excel spreadsheet, Proj_Template, has been included as a reference for this assignment. You may use this spreadsheet to enter input parameters and run economics for each Case. If you do so, be sure to save each case as a separate file, because you will be referring back to it as you progress through the assignment.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Prepare the required permission requests for drilling, workover/recompletion, stimulation, abandonment and well servicing operations to satisfy the established legal requirements of governmental regulatory organizations.

Learning Objective:

Upon completion of this module, the participant should be able to follow proper procedures for obtaining permission to conduct drilling, workover/recompletion, stimulations, abandonment proposals and well servicing operations, in accordance the established legal requirements of the MEM, MARNR and other official organizations.

Assignment Instruction:

The Ministry of Natural Resources is a department of the National Executive of the Republic of Sucre. Its responsibilities include establishing norms and regulations for business operations in the hydrocarbon sector, in accordance with laws established by the National Legislature.

As is true for similar regulatory agencies in other countries, the Ministry of Natural Resources oversees the permitting of oil and gas operations, including those that pertain to well drilling, completion workover and abandonment.

The Ministry's permitting requirements are basically the same as those of the Ministry of Energy and Mines (MEM) in the neighboring Republic of Venezuela, and the norms that it has established for oil and gas operations are identical to MEM standards. For this reason, the questions that you are asked in this assignment use MEM standards as primary reference sources.

In this learning module assignment, you will apply the permitting requirements of the Ministry in the following areas:

Drilling of a new well

Workover and abandonment operations

Project management as it relates to improved recovery operations, well spacing critieria and gas utilization requirements.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Apply the laws, regulations and norms relating to
personal, environmental and industrial safety as they
apply to oil and gas operations.

Learning Objective:

Upon completion of this module, the participant should
be able to

apply the laws, regulations and norms in matters
of personal, industrial and environmental safety,
with the objective of protecting the integrity of
persons, installations, equipment and the environment.

identify instances in which safe practices are
not being followed, and take steps to correct the
situation

Assignment Instruction:

The reservoir is currently in its development and
early production stages. Drilling, construction and
production activities are fully underway. In each of
these activities, it is imperative to maintain safe
operations, protect the health and well-being of
personnel, and preserve the environment.

In this module assignment, you will be observing
drilling rig operations with an eye toward your own
personal safety and that of others at the wellsite.
You will review incident descriptions from various
field locations and try to determine what went wrong
in each case and how the incident could have been
prevented. And you will look at several issues
related to fire protection at an upstream production
facility.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Make appropriate reservoir management and control decisions with the aid of surveillance techniques, information systems and technology applications to generate pressure and production histories, maps and other key reservoir data.

Assignment Instruction:

The Upper/Middle Sands have been on production for about 11 months. Fifteen wells are currently active, and the information that you have available includes both detailed and summary reports of pressure and production behavior. In this assignment, you will use this information to refine the reservoir description, improve well performance and work toward developing an optimal exploitation strategy.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Although individual processes vary widely in type and applicability to particular conditions, they have one objective in common: to improve the displacement efficiency of hydrocarbons from the reservoir.

In this assignment, you will review the performance of the Upper/Middle Sands under primary depletion and conduct a preliminary waterflood screening, including a pilot flood to serve as a field trial of the process. The reservoir has been on production for just over one year. There are currently 15 active wells.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

PLAN: Reservoir Management Practices

Scenario

In this Learning Plan, you will evaluate the Sucre Project in terms of how it affects Petros Corporation's overall performance. You will need to consider the project in the context of the overall hydrocarbon value chain, and consider the role of contractual agreements, the application of new technologies, and the project's contribution to the company's knowledge base.

Task Summary:

Evaluate reservoir exploitation schemes through the use of corporate management indicators. Use reservoir studies to develop a resource base (drilling plans, future improved recovery, information acquisition, application of new technologies, facilities and production infrastructure). Research new technologies and determine their applicability to various aspects of reservoir management. Compare actual reservoir behavior to model predictions; account for differences and evaluate the effectiveness of the exploitation strategy. Analyze scenarios, make suitable contract models and study special projects in areas of the exploitation macroprocess, assuring business profitability and respecting the prevailing laws and norms of contracts.

Evaluate reservoir exploitation schemes through the use of corporate management indicators

Assignment Instruction:

The Upper/Middle sands project is about to complete its ninth year (fourth
production year). You have recently concluded a twenty-month pilot waterflood
in the fault block occupied by Wells 4E2-SE and 4D2-SW. In this assignment,
you will evaluate the results of this pilot project in preparation for
implementing a field-wide waterflood. You will then address the practical
aspects of implementing the full-scale project, generate a development
scenario based on the data that you have gathered during the primary
production stage, and formulate a project budget.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

The Upper/Middle Sands have been on production for more than 20 years, 15 of them under waterflood. On the basis of daily average production, this reservoir has already passed its economic limit, with water cuts routinely exceeding 90 percent. But thanks to the efforts of field personnel in applying good production practices and bringing operating costs down to a minimum, the field is still making a small profit. It remains to be seen whether this field has additional potential through a realignment of the waterflood or implementation of enhanced oil recovery methods.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Analyze scenarios, make suitable contract models and
study special projects in areas of the exploitation
macro process, assuring business profitability and
respecting the prevailing laws and norms of contracts.

Learning Objective:

Upon completion of this module, the participant should
be able to

analyze field projects and generate contract models

evaluate contracts in terms of project profitability

Assignment Instruction:

As a reservoir manager, you are certain to spend much of your time dealing
with companies that provide products, materials or services ranging from
downhole tools to simulation software to engineering expertise. You may also
work with research institutions, government agencies, other operating companies,
and even with private individuals. All of these working relationships are
governed by legal agreements, or contracts.

A contract defines the rights that each party has in
a business relationship, the obligations that each party has toward
the other, and the legal, fiscal and operating
terms under which these rights and obligations are
maintained. When properly drafted and negotiated in good
faith, a contract works to the mutual benefit and
protection of both parties. It is important,
therefore, that you understand and be able to apply
key contract provisions.

In this Learning Module, you will focus on two
types of contracts: a term sheet for a Turnkey
Drilling Contract with Daywork Provisions, patterned
after the International Association of Drilling
Contractors’ model (IADC--1998), and a Master
Agreement for Contract Services, patterned after
models developed by the IADC and the International
Association of Geophysical Contractors (IAGC).

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

PLAN: Drilling and Well Completion Practices

Scenario

The Asset Management Team responsible for PETROS Corporation’s portion of the Tremont onshore field has recently completed an appraisal of the 6th Zone reservoir, and has proposed Adams 8 as the first development well. Your job in this assignment is to develop this initial proposal into a well plan and oversee drilling operations. The goal is to drill a well that meets reservoir management objectives at minimum cost, while maintaining a perfect safety record throughout the operation.

Determine formation fluids to be encountered and potential contaminants.

Outline critical issues relating to surface location, including those related to logistics, safety and environmental protection.

Generate a budget-level estimate of dry-hole and total well costs.

Assignment Instruction:

The Asset Management Team responsible for PETROS Corporation’s portion of the Tremont onshore field has recently completed an appraisal of the 6th Zone reservoir, and is now preparing a development program. The team has given you a proposed bottomhole location for the first development well, Adams 8. The target location is in Block D-4, approximately 0.5 km [1640 ft] from the property boundary between PETROS Corporation and Apex Oil & Gas Company. The discovery well for the 6th Zone anticline was Apex's Copley 1. Four additional wells (Copley 3, Adams 4, Adams 6 and Adams 7) have either tested or are currently producing commercial quantities of oil; Three others (Copley 2, Stuart 1 and Adams 5) were drilled outside of the structure boundaries and subsequently abandoned.
Your tasks in this assignment are to establish the drilling objectives for this well in keeping with the overall reservoir management strategy, and to identify some of the key issues to be addressed in the well planning process.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Select a surface location for a new well and establish an optimal target radius

Pick casing points and specify casing and hole diameters for each drilled section

Establish a well trajectory in keeping with overall drilling objectives

Select casing weights, grades and connections based on consideration of maximum load conditions

Determine general requirements for primary cementing operations.

Specify wellhead equipment components and their working pressure ratings.

Assignment Instruction:

An initial review of the Adams 8 well proposal served to clarify the drilling objectives, identify critical well planning issues and provide some knowledge of the surface and subsurface environments. It is now time to start the designing the well. The starting point will be to finalize the surface and bottomhole locations so that you can establish a well profile. At the same time, you will pick your casing points, decide on the casing and hole diameters for each interval and recommend the working pressure ratings for the wellhead components. You will then specify the weights, grades and connections to be used for each casing string, and outline the primary cementing requirements for the surface casing. Finally, you will provide a cost estimate to be used in preparing the AFE for this well.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Design mud program for each hole section. Establish well control precautions and procedures. Design drill string and bottomhole assembly. Plan bit and hydraulics programs. Evaluate rig specifications and capabilities.

Learning Objective:

Upon completion of this module, the participant should be able to:

Outline mud system specifications for individual hole sections based on well conditions and drilling objectives.

Establish basic well control requirements.

Specify circulating system requirements and evaluate hydraulics practices based on offset well performance.

Review offset bit performance as a basis for developing bit selection criteria for a new well.

Provide general recommendations for the drill string configuration and design of the bottomhole assembly.

Review rig specifications and capabilities in the context of drilling program requirements.

Assignment Instruction:

In this assignment, you will address various aspects of planning and carrying out the drilling program for Adams 8, a new development well in the Tremont field. Your work will include designing the mud and hydraulics programs, reviewing basic well control precautions, establishing guidelines for bit selection, and designing the drill string. Although you will not be directly involved in reviewing bids and selecting the drilling contractor, you will be providing input regarding power requirements, hoisting capabilities and circulating system capacities that will be valuable in the rig selection process. Your goal in this assignment is to develop a program that ensures safe well operations, minimizes drilling cost and meets the design requirements of the well.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Monitor drilling parameters and well progress. Take steps to optimize bit runs, mud system performance and directional control. Ensure HSE compliance. Anticipate drilling problems and work to minimize their impact.

Learning Objective:

Upon completion of this module, the participant should be able to:

Optimize drilling performance through careful monitoring and analysis of well parameters.

Monitor drilling parameters for indications of abnormal pore pressure and take the approriate initial actions in response to a potential kick situation.

Assignment Instruction:

The drilling crew is ready to spud Adams 8, and you are in charge of day-to-day operations. To begin this assignment, you will approve the bottomhole assembly configuration for the surface hole interval and supervise the running and cementing of a 13 3/8 inch [339.7 mm] casing string. Next, you will monitor the progress of the intermediate hole section and take steps to optimize drilling performance. Finally, you will begin drilling below the intermediate casing, paying particular attention to detecting a pressure transition zone that has already been identified at other 6th Zone wells. By way of caution, note that drilling operations do not always proceed smoothly. Although this assignment is fairly straightforward, be prepared to address problems that may occur.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Prepare well for formation evaluation. Ensure that logging and testing operations proceed smoothly. Run and cement production casing. Evaluate primary cement job and need for remedial cementing operations. Prepare well for final completion.

Learning Objective:

Upon completion of this module, the participant should be able to:

Prepare the well for open-hole logging operations and take steps to ensure that such operations proceed smoothly.

Alert the wellsite geologist and service company logging engineer of hole conditions that may require modifications or special precautions in the logging program.

Assist in planning and carrying out a drill stem test.

Determine safe operating parameters for running a production casing string.

Plan and carry out a simple single-stage primary cementing operation.

Use temperature surveys to determine the top of cement in the casing/hole annulus.

Outline the steps involved in preparing the well for final completion and releasing the drilling rig.

Assignment Instruction:

As you approach target depth at Adams 8, your concern now shifts from optimizing the drilling process to preparing the well for logging, testing and completion operations. Although you are not directly involved in planning the formation evaluation program, you are responsible for monitoring hole conditions, getting tools safely to bottom and in general ensuring that operations proceed according to plan. Once these operations are completed, you will focus on the crucial task of running and cementing the 7-inch [178 mm] production casing. At the conclusion of this assignment, the well should be ready for a workover rig to perforate the production casing, run tubing and turn the well over to the Production Department.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

PLAN: Production and Operating Practices

Scenario

The pace of activity at Petros Corporation has increased over the past year, and so have your areas of responsibility as a production engineer. You are now involved with several reservoirs, each of which has its own set of concerns. In the Main Body Sand of the Firestone field, for example, you will be designing the production system for a flowing well, while in other fields, you will be evaluating artificial lift methods, designing well stimulations, reviewing problem wells and planning workovers. You will also be helping generate specifications for an upstream surface facility. At all times, you will be focused on maintaining safe operations and complying with all policies, procedures and regulatory standards.

Use production data to define a well's IPR and flow potential under current operating conditions.

Predict changes in well potential resulting from declining reservoir pressures.

Evaluate the effects of various operating parameters on flowing well performance.

Design a single-well production system based on analysis of individual system components.

Select the appropriate tubing and flowline diameters for optimizing well performance.

Predict future production rates based on changing operating conditions.

Assignment Instruction:

Well TR-34 is a recently completed development well in the Main Body sands of the Firestone Field. You have just completed an extended production test of this flowing well in preparation for tying it into the field's main production facilities. In this assignment, you will treat this well as a single production system extending from the reservoir to the first-stage production separator. You will analyze the test results to determine the well's potential and the effect of various operating parameters on its performance. You will then use your analysis to establish an optimal production rate and size the tubing and surface flowline.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Artificial lift is a means of reducing the backpressure on a well so that it can be produced at some desired rate. This may be accomplished by reducing the density of the wellbore fluid column, as is done in gas lift, or by using a pump to physically displace the fluids to the surface. In this Assignment, you will consider both types of artificial lift as you evaluate three scenarios: (1) a flowing well that has experienced a significant decline in production rate as reservoir pressure has decreased, (2) a well that is to be incorporated into an existing gas lift system, and (3) the installation of an Electrical Submersible Pump (ESP) at a water source well. Although these scenarios do not cover all of the artificial lift systems and combinations of methods that are currently available, they will give you a good idea of the issues that you must consider in designing such a system.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Diagnose various types of formation damage and identify stimulation candidates.

Design a matrix acid stimulation treatment based on specific well conditions and reservoir characteristics.

Specify the materials, equipment and pumping schedule for a hydraulic fracturing procedure.

Apply traditional and modern sand control methods to optimize well productivity

Assignment Instruction:

Well stimulation treatments, which are designed to restore or enhance well productivity, are of two basic types. Matrix treatments are performed at pressures that are below the formation fracture pressure; they are primarily designed to remove near-wellbore damage. Fracture treatments, on the other hand, are performed at pressures above the formation fracture pressure; they are designed to open up highly conductive flow paths between the reservoir and the wellbore, thereby bypassing near-wellbore damage and changing the flow patterns around the well.

Sand control technolgy is built around preventing loose sand and other unconsolidated formation solids from plugging the formation or entering the wellbore. As you will see in this assignment, stimulation and sand control technologies are in some ways closely related, and under certain circumstances, may even overlap.

In this assignment, you will carry out preliminary design work both for a matrix acid stimulation and a hydraulic fracture treatment, and will also select the appropriate sand control measures for a flowing production well. In each case, you will evaluate the nature and extent of the near-wellbore damage that has made stimulation and/or sand control necessary.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Identify workover candidates and outline procedures for accomplishing well objectives.

Learning Objective:

Upon completion of this module, the participant should be able to

Evaluate well performance and identify workover or abandonment candidates.

Plan safe workovers using the tools and methods appropriate to individual wells.

Apply procedures and standards in accordance with recognized safe practices and regulatory requirements.

Assignment Instruction:

A review of the producing wells in the Adams portion of the Tremont Field has indicated that several wells need attention and may be workover candidates. In this assignment, you will evaluate conditions at these wells, take steps to troubleshoot these conditions, and recommend remedial action. You will also be getting ready to perforate the production casing in Adams 8, a newly drilled Sixth Zone producer.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Generate production facilities requirements. Promote safe practices in production operations.

Learning Objective:

Upon completion of this module, the participant should be able to:

Review surface flowing well conditions with the goal of optimizing production.

Describe the basic layout of an upstream producing facility and the functions of its major components.

Outline the general requirements for separating and treating produced oil as a basis for a detailed facility design.

Plan and oversee routine field maintenance work, and maintain a safe operation through proper application of good work practices and the careful control of site activities.

Assignment Instruction:

The Sucre field's existing upstream surface facilities are designed for primary recovery, but that is about to change as preparations begin for a full-scale water injection project in The Upper/Middle Sands. As part of these preparations, you will address some of the general issues involved in modifying these facilities. You will also be involved in ongoing field operations; specifically, you will be responsible for safely completing repair and maintenance work on one of the field's main production separators.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

PLAN: Exploration Project Management

Scenario

The Exploration manager has responsibilities for both the quality of a prospects technical assessment and its commercial and economic success. Because of the risks, complexities, and the sheer magnitudes of the investment decision process, your company has implemented a Decision Review Board that makes decisions regarding the expenditure of capital. To support this business structure your company has divided the analysis and decisions into discreet, sequential stages using a disciplined project management approach used in most oil & gas companies. In Learning plan 7 you will work through these defined stages and processes and make your recommendations to the review board for equity funding.

Task Summary:

As the Exploration Manager you are being asked to understand the success potential of prospects coming to you via your team’s efforts and from outside requests for participation.

You will analyze these opportunities using both technical and economic metrics with the goal of securing equity capital from your company. To make these decisions you will guide your team through an approved exploration process governed by sound exploration project management processes and methodologies. Project Management plays an important role in this process as it assures your decision management team that critical information has been gathered, analyzed, and presented as part of their decision process.

Economic analysis of your team’s prospects will be critical to securing the company funding. Therefore building financial models to demonstrate key economic metrics is covered giving you a solid baseline to measure the various opportunities.

Oil and Gas exploration is a technology intensive business with the goal of reducing uncertainty and risk. You will analyze the role of technology, its cost, and its economic affect on a prospects value to the company.

Given this understanding of the key metrics associated with capitalizing a new wildcat well you will take on the role of a decision review board member and make a decision on appropriating the necessary funds.

Learn the technical and management steps that are followed to move an exploration opportunity from play to a prospect by applying a series of progressively expansive data collection steps beginning with aerial or satellite imaging, then gravity and magnetic surveys, seismic surveys, exploration and appraisal well drilling, reservoir characterization, resources estimation and economic analysis.

Learning Objective:

Learn the progressively more expansive data collection and analysis steps that are applied to an exploration opportunity from the negotiation of a host country agreement to the request for funds to move to Field Development Planning.

Learn how the exploration process involves making decisions to acquire data under conditions of uncertainty. (value of information)

Learn how exploration and appraisal wells are located to delineate a prospect.

Learn how resources are estimated using the SPE system under conditions of uncertainty

Your company has negotiated with a host country an exploration agreement to explore for oil & gas. In this assignment your team will follow an exploration workflow process to advance a play concept to a drillable prospect.
In your role as the exploration manager, you will need to guide your team through this defined process involving commercial data management, geotechnical, operational, and knowledge management steps so as to progress an opportunity to a drilling decision.

If the exploratory well is successful your team will need to examine the SPE resource definitions and how this may affect future financing. Based on this information your team will need to propose several delineation wells that will identify the extents of the reservoir(s) while minimizing exploration capital. You will then revise your economic estimates based on new information and economic indicators.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Perform economic analysis of petroleum projects under conditions of uncertainty. Develop simple examples of project metrics using spreadsheet Monte Carlo simulations for stochastic analysis. Build financial models to show project cash flow streams for both capital investment and income cash flow and calculate key metrics such as profit/investment ration, profit, payout period, net present value, internal rate of return and expected monetary value. Where there are uncertainties in the variables, use standard software to prepare sensitivity and stochastic analysis to show the potential variations in the metrics because of these uncertainties.

Learning Objective:

In this module you will learn:

To analyze the economics of a prospect under conditions of uncertainty

To prepare sensitivity and stochastic analysis to measure potential variations in project metrics

Read all the reference material included under the Reference Selector and Field Data and Reference tabs.

Assignment Instruction:

In this Action Learning Module you will learn how to prepare a typical Prospect Economic Metrics Profile for a Southeast Exploration Prospect by answering a set of questions. You will be asked to consider two funding scenarios:

(a) where the prospect capital is fully funded with shareholder equity funds and

(b) where 50% of the funds are obtained through debt financing.

Initially you will develop the Profile for a set of “Base Case” assumptions and then you will learn how to analyze uncertainty in the key Base Case variables using the three traditional ways of analyzing uncertainty: Deterministic, Tornado Diagram and Monte Carlo Simulation.

At the top of each assignment page we have provided you with downloadable Reference Files and links to IPIMS Background Knowledge. Please use these resources to assist in answering the assignment questions.

At the end of the learning program you will be asked whether, as the Exploration Manager, you would approve the investment in this Prospect.

Oceana – A Petroleum Prospect Economics Workshop

Assignment Background

Your company has identified an exploration prospect in the Republic of Oceana, a small country in Southeast Asia, near Indonesia, and you, as Team Leader, have been asked to analyze the economics of the prospect and submit a summary of its key prospect metrics to management.

You are to evaluate this exploration opportunity and build a financial model that will integrate the risks associated with this investment. The model will account for the proposed host country agreement and then incorporate revenue, capital and operating costs, financing costs, and tax projections for the life of the project. You will also be asked to submit your recommendation to management based on the performance metrics that are the outcome of your analysis

Analysis to Be Performed

You will analyze your prospect economic metrics by completing a series of assignments. In doing so you will calculate each of the metrics and summarize them in an appropriate table to be provided to your management along with your recommendations as to whether the prospect should be pursued.

You will need a computer with Excel or comparable spreadsheet software and, if possible, with Crystal Ball as an add-on in order to perform some of the project uncertainty calculations. If you do not have Crystal Ball you will be able to complete the exercises using an “IHRDC Apps” to perform the Tornado Diagram and Monte Carlo Simulation exercise that are located later in the learning assignments.

Assignment Memorandum

You have been provided with the following Confidential Memorandum from your Director of Regional Exploration.

Confidential Memorandum

Oceana Exploration Corporation

Southeast Asia Exploration Group

TO:

Director, Financial Analysis Group

FROM:

Director, Regional Exploration

RE:

Summary of Exploration Potential of the Baru Prospect

This memorandum is a summary of our team’s analysis of the Baru Prospect, Republic of Oceana, including its exploration potential, dry hole costs, development options and operating costs, markets and estimate of reserves. We ask that you prepare the financial metrics for the opportunity by completing a series of assignments.

The Baru Prospect is located onshore the Republic of Oceana in the East Oceana Basin. The main producing target is the Brad Sandstone, which we expect to penetrate at a depth of about 4500 feet below sea level. We have collected substantial data from two nearby analog fields owned by competitors that are producing from the same formation.

Our geological analyses of the basin and the prospect are based on the analysis of regional geological data, including well logs, geochemical data and a substantial 2D seismic survey, which we performed last year. A subsurface structural map of the prospect is shown in the image below.

On the basis of the prospect information and the performance of two other existing fields we project the following prospect fundamentals:

Project Development Schedule

We expect a project schedule (see below) that begins with three years of Exploration (E1-E3). If we have a discovery that is economical to develop, we will follow exploration with two years of Field Development (D1-D2), and 20 years of Production (P1-P20) when all developments and prospect rights must be returned to the host government. The project schedule is shown below.

Exploration Risk

Our exploration team has analyzed the five major requirements of a prospect (source rock, migration path, reservoir rock, trap and seal) and has estimated that the probability of an exploration well success is 64%.

Host Country Bonus Payments

We have agreed to pay the host country two forms of bonus payments:

Signature Bonus (E1)

$5,000,000

Discovery Bonus (E2)

$10,000,000

Exploration and Dry Hole Cost

We expect that we will need to commission a detail seismic survey in E1, drill an exploration well in E2 so as to “drill into and test the reservoir” with the following estimated costs:

Year E1: Seismic Surveys and Interpretation

$5,000,000

Year E2: Exploration Well

$15,000,000

Please note that these costs are subject to some uncertainty.

Appraisal of Discovery: Appraisal Wells

In order to confirm the discovery, evaluate the reservoir properties and the areal extent of the field we feel that there will be a need to drill at least two appraisal wells during Year E3.

Year E3: Two Appraisal Wells

$ 30,000,000

All three wells will be vertical wells and can be completed as producers during the development period for an additional cost of $500,000 per well.

Expected Reserves and Market Prices

If we have a discovery we expect the hydrocarbons to be medium grade crude oil, which should sell at a small discount to the Dubai Marker Crude prices, and associated gas. We expect a gas-to-oil ratio (GOR) of about 750 SCF/stock tank bbls. We have a preliminary understanding from the Oceana Power Company that it will buy our produced gas for $2.50/MCF delivered at our field processing center.

On the basis of the existing 2D seismic survey and data from the other producing fields we estimate the crude oil resources to be approximately 500 million bbl of stock tank oil initially in-place (STOOIP). We expect that the recovery factor will be equal to 20% of these resources if we rely on natural depletion drive, and up to 40% with enhanced recovery using bottom water injection. Because of its higher recovery factor we ask that this option we used in your analysis.

End of Memorandum

Cash Flow Analysis of the Prospect

Your study team begins its financial analysis of the prospect by calculating its “best estimate” for both the Investment and Income Cash Flow projections. Then you are to prepare the Investment Cash Flow projection by preparing the field development plan and its cost.

Field Development Plan

Your team plans to initiate enhanced recovery of the reservoir at the outset by installing water injection wells and treatment/pumping facilities during the Development Period. The reservoir engineering team recommends that the reserves be produced over a 20-year period at a fixed production rate of 32,000 STB/D for 11 years and declining 2000 STB/D annually through P20. The production rate in P20, then, will be 14,000 STB/D. The sustained production rate per well from P1 to P11 is estimated to be 2500 STB/D.

Facilities Needed to Develop the Field

Your team estimates that it will take two years to develop the field (D1 and D2) and require 13 producing wells, which can be achieved by converting three exploration wells to producing wells and drilling 10 new development wells. It recommends using five water injection wells to replace the produced oil, surface separation facilities to separate and treat the produced fluids, a water treatment plant for the injected water and a 160- km crude oil pipeline, storage and port facilities to be located within the Oceana Industrial Park. These are all shown schematically below.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

You will analyze the economic “value of information” that can be achieved during the exploration process by applying various decision making technologies at progressively higher costs to reduce uncertainty, thereby providing better estimates during the decision process.

Learning Objective:

The objectives of this learning module are to:

Measure the value of data vs. the cost to acquire the data.

Determine multiple data acquisition scenarios that can accomplish the goals and measure their impact on the prospects economics

Understand the cost-benefit decision process and exploration uncertainty in making both technical and business decisions.

Review all the supplied reference materials included under both the Reference Selector, and Background Knowledge buttons. The reference material file includes downloadable tools you will use to answer the assignment questions

Assignment Instruction:

The exploration team has presented both structure and stratigraphic maps associated with a prospect. However, the maps and therefore the associated reservoir economic estimates are based on old vintage 2D data and low density well and outcrop data in the area. Based on the available data it appears that both structure and traps are present and that reservoir properties (sand/shale, porosity, and permeability) are sufficient for hydrocarbon trapping and production, however, you recognize the uncertainty associated with this assumption and the risks it presents to the success of the prospect.

To reduce this uncertainty and improve your estimate of resources you ask your team to evaluate the introduction of various technology solutions. The team will need to look at their costs, the potential amounts of uncertainty reduction, and the potential upside it would bring to the prospects economics. Your team will then rank the technology solutions based on the value they can bring to the project.

Review all the supplied reference materials included under both the Reference Selector, and Background Knowledge buttons above. The reference material file includes downloadable tools you will use to answer the assignment questions.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Upon successful completion of this module you will understand, and have used, key methodologies and business processes involved in the approval of an exploration well, and other projects, by a company's exploration and senior management. These include a critical technical and economic review of an exploration prospect and its risked and unrisked economic analyses in the context of both the corporate economic measure of merit hurdles required to be cleared in order to receive funding support and the potential for company exploration budget constraints. The learner will have experienced ways to address project uncertainties and followed the sequence of internal company and partner decision and approval processes before exploration drilling preparations can start. Finally, you will understand the importance of aligning exploration efforts with company strategy and will have an insight into host government strategies to attract exploration.

Learning Objective:

Upon successfully completing Learning Module 4, you should be able to:

Perform a critical technical review of an exploration prospect.

Perform a critical economic review of an exploration prospect.

Use discounted cash flow techniques and calculate a range of different economic measures of merit when capital is rationed.

Utilize economic thresholds in investment decision making.

Address project uncertainty in the decision making process.

Incorporate risk analysis in investment decision making.

Identify the key components and stages of the decision process to approve well activities.

Review oil company and host country exploration strategies.

Align exploration acreage acquisition efforts with company strategy.

Read all the reference material included under the Reference Selector, and References and Field Data tabs.

Assignment Instruction:

Your company, the Greque Oil Company, is a successful and ambitious oil company. In Assignments 1 and 2, the company has entered into an agreement to explore a 1,500 square kilometer offshore block in a foreign country. As a member of the Executive Review Board, you will conduct critical technical reviews of an exploration prospect at two different stages (one year apart) of its maturity.

In Assignment Page 3, the Greque Oil Company has four wells in one of its fields, each with investment opportunities. You are asked to maximize the value of these potential projects under the company's current capital rationing constraints, prioritizing the well activities appropriately.

In Assignment Page 4, you will address the risks and uncertainties in these well projects as part of the investment decision making process.

In Assignment Page 5, you will follow the key stages of the decision processes required in order for the Executive Review Board to approve well activities.

In Assignment Page 6, you will experience matching exploration acreage acquisition targets to the company strategy as defined by the Executive Review Board.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

In this learning module you will be introduced to the project management stage-gate process, with attention to Stage One, the Exploration Stage. Specific focus is placed on the host country licensing agreement and its commercial terms, the value of information as it applies to the exploration process; including the manner in which an opportunity progresses from play to prospect, the drilling of exploratory wells and the formation evaluation decisions.

The estimation of resources using the SPE resources management system, and the project economic analysis using both deterministic and stochastic analysis will be covered.

Learning Objective:

Upon complication of this module, the learner will be able to

Describe the Exploration Project Management methodology and its role in the exploration process

Understand the Exploration Process from both a technical and business management perspective

Apply the SPE Resources Management System to exploration opportunities

Understand the role of risk and uncertainty and the costs associated with risk reduction and its impact on profitability

How to develop business metrics for an exploration prospect using project economics under conditions of uncertainty

How to review the business and technical criteria necessary to move an opportunity from play to prospect through disciplined process that leads to a commitment to move to Stage Two: Planning Field Development

Assignment Instruction:

In this learning module you will be introduced to the project management stage-gate process, with attention to Stage One, the Exploration Stage. Specific focus is placed on the host country licensing agreement and its commercial terms, the value of information as it applies to the exploration process; including the manner in which an opportunity progresses from play to prospect, the drilling of exploratory wells and the formation evaluation decisions.

The estimation of resources using the SPE resources management system, and the project economic analysis using both deterministic and stochastic analysis will be covered.
In this module we will use as a case study, an offshore exploration opportunity in the hypothetical Republic of Nicola, to demonstrate how the Stage-gate Process is applied in practice. We will follow the exploration and development of the Agbami Field, a deepwater oilfield located about 70 km offshore Nigeria. This challenging project came onstream in 2008, almost 10 years after oil was discovered on November 20, 1998.

Please continue now to Stage One where you will learn what happened during the exploration of the Nicola opportunity. Learn how our Technical and Commercial Teams worked together to prepare their report to management in support of undertaking exploration in that country.

Upon complication of this module, you will be able to:

• Describe the Exploration Project Management methodology and its role in the exploration process.

•Understand the Exploration Process from both a technical and business management perspective.

•Apply the SPE Resources Management System to exploration opportunities.

•Understand the role of risk and uncertainty and the costs associated with risk reduction and its impact on profitability.

•How to develop business metrics for an exploration prospect using project economics under conditions of uncertainty.

•How to review the business and technical criteria necessary to move an opportunity from play to prospect through disciplined process that leads to a commitment to move to Stage Two: Planning Field Development

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

PLAN: Corporate Exploration Planning and Management

Scenario

Exploration planning and management examines scenario planning and business analysis from the corporate perspective and the investment profile of plays and prospects in the context of company strategy and future growth. In Learning Plan 8 you will examine processes and best practices generally accepted across the industry and you will be placed in the role of a decision review board member making investment decisions and portfolio adjustments for your company.

Task Summary:

In Learning Plan 8, you participate in the process of scenario planning and business analysis for the company learning key input data. You will examine best practices and procedures at the corporate level that define how to move an exploration idea from concept to drilling. The role of diversification is examined as you learn how to develop a corporate portfolio and then to manage it to its maximized potential. Finally today’s drilling activities need to be done in the context of being a good corporate citizen. You will participate in the development of an environmental impact evaluation with the goal of obtaining the necessary permits to proceed with an exploration project and securing the capital funding necessary to drill the exploratory well.

You will learn how to apply strategic scenario planning and business analysis techniques to analyze different options and select the optimal approach for business expansion into new strategic opportunities and areas.

Learning Objective:

Upon completing this Learning Module, you should be able to:

• To understand the principles of strategic planning and the role of the planning process in addressing the aspirations of the enterprise and managing the economic growth of the organization

• To develop corporate strategies, using scenario planning techniques, in order to improve profitability, respond to new business opportunities, and achieve sustainable competitive advantage

• To learn the key elements that lead to corporate advantage and that create value for your enterprise

• To apply the principles of the balanced scorecard while implementing decision making processes

Note: For this action learning module, you must first read the material under the Reference and Field Data or Reference Selector tabs.

Assignment Instruction:

Your company's major product, methanol, relies for feedstock upon a long term supply of low cost natural gas. Recently your business has been impacted by the loss of key gas supplies because of exhaustion of reserves and curtailment caused by geopolitical conditions.

This has prompted your company to look worldwide at how it can stabilize the gas supplies either by entering the gas exploration business or purchasing gas in other countries.

You are asked to evaluate several new business opportunities using scenario analysis. Opportunities include traditional exploration, unconventional gas, joint ventures in existing projects and direct purchase. You will use financial models and related business analysis methods to prepare recommendations to the board.

Note: For this action learning module, you must first read the material under the Reference and Field Data tab in the assignment section.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

You will learn how best practices and procedures, including workflow management, are applied to Petroleum exploration and how they lead to streamlined, predictable and efficient use of the company's resources and improved business performance.

Learning Objective:

Learn the essentials of the five-stage life cycle of a petroleum project that are an integral part of the corporate planning and exploration management process

Learn the standard documents and procedures that should be applied to petroleum exploration

Learn a typical exploration workflow and best practices used in petroleum exploration

Assignment Instruction:

In this assignment your methanol company elects to explore for its own natural gas resources and it is up to you to develop the standard best practices and workflow management that should be applied to exploration projects as they are processed through stage one of the stage-gate process.

This consists of pursuing a workflow sequence of activities and preparing documents and procedures that lead to a disciplined project management approach to the exploration process.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Petroleum exploration opportunities, like investments in the stock market, face a wide range of risks with substantial impact on ultimate financial performance. However, with careful planning, analysis and selection, these projects can be grouped into portfolios with relatively predictable outcomes. In this module you will learn how energy opportunity diversification using portfolio management processes leads to a predictable commercial outcome. Global exploration opportunities are studied in the context of reserve and income replacement.

Learning Objective:

Upon completing this Learning Module, the learner should be able to:

• Learn the key business fundamentals of an enterprise, including existing businesses and their historical performance

• Analyze and characterize the portfolio of existing and potential businesses, and rank them in terms of business performance fundamentals and the strategic objectives of the enterprise.

• Learn how to apply risk to your decision process and its effect on the portfolio.

Note: For this action learning module, you must first read the material under the Reference and Field Data or Reference Selector tabs.

Assignment Instruction:

It turns out that the decision by your methanol company to invest in exploration five years ago has led to substantial financial success for the company. With this new found wealth it is time for you to expand your exploration presence by investing in a portfolio of opportunities and making investment decision on worldwide opportunities based on your corporate vision and mission.

You will be presented with a group of new investment opportunities and must select those that meet your portfolio objectives. You may choose to add additional investment to the current portfolio or divest your current interests and replace with new opportunities that will achieved an improved portfolio performance.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

Using modern portfolio management theory and practice the learner will use your methanol company’s current enterprise wide operating assets and new exploration opportunities to optimize the performance of its integrated portfolio. In the process you will learn to build and manage the portfolio as you review the current assets and new opportunities using portfolio management techniques and within the existing investment environment.

Learning Objective:

Learn to apply Portfolio Management to exploration opportunities

Learn what an efficient frontier is and its role in portfolio performance optimization

Learn the various ways you can go about rebalancing your enterprise portfolio

How to apply passive and active portfolio rebalancing

Note: For this action learning module, you must first read the material under the Reference and Field Data or Reference Selector tabs.

Assignment Instruction:

The decisions for this assignment take place ten years after your methanol company's initial analyses regarding the construction of a corporate portfolio. Your team receives data about the performance of the enterprise businesses, as well as information about the current business environment and changes in the global trends that are affecting your petroleum investments.

You will be offered a new slate of business opportunities for consideration. You will need to develop recommendations to optimize your enterprise portfolio by maximizing return on capital employed and other key business criteria.

INSTRUCTIONS AND HELPFUL HINTS

This training course places you in the role of a business analyst in a division that produces gas feedstock for a methanol production plant. There is a single consistent expectation that is reflected throughout this role: you must select the optimal approach for developing a diversified portfolio that maximizes a trio of financial values and a pair of performance ratios.
The existing portfolio is composed of a variety of LAND based, SEA based, BIOMASS based, and even LANDFILL based investments. Your portfolio strategy is to maximize the levels of Earnings and Reserves in the portfolio, as well as the Return on Capital Employed (ROCE) and a Corporate Social Responsibility ratio that measures strategic and social performance levels. One of your primary challenges will involve the need to maximize outcome metrics like Earnings and Reserves while minimizing the amount of capital employed to generate them.

You will be asked to develop a baseline assessment of the performance of your existing LAND portfolio. Then you will be asked to expand that baseline assessment to the comparative performance metrics of your SEA, BIOMASS, and LANDFILL projects, followed by a variance analysis on your total portfolio.

After you complete your baseline evaluation with the construction of an efficient frontier chart, you will proceed to address more complex evaluative considerations. For instance, you will assess whether a passive portfolio rebalancing strategy is sufficient to achieve your investment goals, and will then explore several active portfolio opportunities as well.

How will you decide on the optimal option? You will need to develop a methodology that computes the relative impact of each portfolio management strategy on your financial performance metrics. At times, you will also need to apply your professional judgment to situations when the metric measurement methodologies may themselves may require reassessment.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain:

The learner will be introduced to the systematic process that is used by international companies to identify, mitigate, and manage environmental impacts of proposed upstream oil and gas projects using World Bank Standards and the Equator Principles.

Learning Objective:

Learn the scope and application of environmental regulations necessary to receive environmental permits to proceed with exploration projects

Learn the essence of environmental and social impact statements (EIS), their scope and implementation for exploration projects using the World Bank process as a universal model

Learn how to apply the Equator Principles for international projects that require bank financing

Learn how to manage the EIS process from initiation to final audit for an E&P project

Review summaries of EIS filings for actual exploration projects

Assignment Instruction:

Your team has proposed an exploration drilling program located on the continental slope in an area of uniformly smooth seabed ranging in depth from 1,900m to 1,950m. To the north the continental slope continues to decline steadily reaching depth in excess of 2,500m in the Romit trough. The scope of this assignment is all operational activities relating to the drilling of the exploration well.

To secure the proper permits you and your team will need to demonstrate to the national Directorate of Environment that the management of all environmental and socio-economic impacts have been considered.

Background Learning Prerequisites:

In order to successfully complete this assignment, you will need to complete the following Background Learning subtopics, or be familiar with the subject matter that they contain: